Apple shifts iPhone production to India amid tariff concerns

In light of the ongoing trade tensions and tariff issues under President Donald Trump, Apple Inc. has made strategic shifts in its supply chain. The company's CEO, Tim Cook, announced that the majority of iPhones sold in the United States in its current fiscal quarter would originate from India, a move designed to mitigate the impacts of the tariffs imposed on Chinese goods. As of early 2025, Apple has been actively enhancing its production capabilities in India for several years. The trade war has created a pressing need for Apple to reduce its dependency on Chinese manufacturing for the U.S. market. During the fiscal second quarter, Apple reported profits and revenues that exceeded Wall Street expectations, generating $24.78 billion, equating to earnings of $1.65 per share. This represents a 4.8% increase compared to the previous year. Revenue also rose by 5.1% year-on-year, tallying $95.36 billion. However, despite positive earnings, Apple’s stock performance saw a significant plunge of 23% following tariff announcements made by Trump. This downturn signified a loss of approximately $773 billion in shareholder wealth. Increasing managerial pressure on Cook suggests that he must navigate these challenges while maintaining favorable relationships with political leaders. To counteract unfavorable market conditions, Apple has started sourcing other devices, including iPads, from Vietnam. The company's strategies put forth by Cook aim to address the immediate impacts of tariffs while anticipating future market fluctuations. However, analysts remain cautious about consumer behaviors post-tariff announcements, as any surge in sales passed over to the company from panic buying will reflect in upcoming financial reports only in the summer. Despite these challenges, Apple is under pressure to enhance artificial intelligence features in new products, particularly the iPhone 16 lineup, which have not lived up to early expectations. The AI capabilities were not fully operational at launch, leading to a retraction of promotional campaigns by the company. Though Apple continues to explore advancements in AI, the company is monitoring market demand and consumer response, as last year’s sales dipped by 2% from 2023’s levels. This situation is further complicated by the potential for ongoing trade war developments in the next few years.