Apple’s Backup Plan? Half of US iPhones Now Made in India, Vietnam to Beat Tariffs

Apple addressed several concerns during the quarterly earnings call on Friday. Perhaps the most crucial is the impact of tariffs on iPhone prices and how that could change the company’s business in the US. Taking that uncertainty head-on, Apple’s chief executive officer, Tim Cook, explained why the company is not worried about the tariffs, and that it has a lot to do with India.

Cook told CNBC in an interview that half of the iPhones sold in the US are now sourced from India, while other products come from Vietnam. “If you look at the US, over half of the US sales of iPhone come from India. If you look at the other products, Mac and iPad and AirPods and the Watch, almost all of the country of origin is Vietnam,” said Cook.

Both India and Vietnam have lower tariffs than China, making them more appealing in the current situation, wherein Washington has increased the restrictions on exports from China. Apple’s strategy to diversify its supply chain outside of China a few years back is paying off, enabling the company to offset any potential effect from the tariffs that are currently on hold for smartphones, computers, and other electronic items.

According to Cook, iPhone exports from India accounted for 97.6 per cent of the total US sales in March, significantly up from 81.9 per cent during the December-February period. Apple’s supply chain in India includes three manufacturers: Foxconn, Tata Electronics, and Pegatron. While Foxconn has led the iPhone production in India for the past few years, Tata Electronics has reportedly emerged as the biggest iPhone producer with two plants in southern India.

However, China contributes more than 75 per cent to the global iPhone production, while India accounts for roughly 18 per cent, per a report by Counterpoint Research. Apple is reportedly boosting its supply chains in India to double the iPhone production as tensions between the US and China are escalating. It plans to source all the iPhones for the US from India by 2027.

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