Why Made-in-US iPhones are a pipe dream – Firstpost

United States President Donald Trump doesn’t need Apple to construct its merchandise in India. The Republican chief expressed his opinion at a enterprise occasion in Qatar’s Doha on Thursday (Might 15).

Trump stated that he had a “little drawback” with Apple CEO Tim Cook dinner. “I stated to him, my buddy, I’m treating you superb. You might be arising with $500 billion, however now I hear you might be constructing throughout India. I don’t need you constructing in India. You possibly can construct in India, if you wish to care for India as a result of India is likely one of the highest tariff nations on this planet, so it is rather arduous to promote in India,” the US President stated.

Whereas claiming that New Delhi has supplied a zero tariff fee on US imports, Trump stated, “They (India) supplied us a deal the place principally they’ve agreed to cost us actually no tariffs. I stated Tim, we’re treating you actually good, we put up with all of the vegetation you inbuilt China for years. We aren’t involved in you constructing in India. India can care for themselves.”

New Delhi has not made any such remarks about dropping all tariffs on US items.

Nonetheless, Trump’s plan for Apple to make its merchandise within the US just isn’t possible. In truth, it may triple the value of the iPhone.

Let’s take a better look.

iphones in India

India at present makes up for about 14 per cent of world iPhone meeting, in response to the Financial Survey 2023-24.

The US tech big is now hoping to take advantage of its iPhones bought within the US in India by the tip of 2026, a supply instructed Reuters.

Apple sells greater than 60 million (six crore)
iPhones
within the US yearly, of which roughly 80 per cent are presently made in China.

China makes about 90 per cent of the about 200 million (20 crore) iPhones that Apple sells world wide yearly, reported New York Instances (NYT).

In keeping with estimates from Evercore ISI, China accounts for Apple’s 80 per cent manufacturing capability. In recent times, Apple has diversified its provide chain past China to international locations like India and Vietnam.

The Cupertino-based tech big assembled iPhones value a whopping $22 billion in India within the 12 months ending March 2025, a pointy 60 per cent hike from the earlier fiscal 12 months, in response to a Bloomberg report.

India now accounts for 20 per cent of Apple’s whole iPhone manufacturing, or one in each 5 models made globally.

The iPhone maker has three vegetation in India – Foxconn’s mega plant in Tamil Nadu and two extra – one other in Tamil Nadu and the third in Karnataka, that are run by the Tata Group. Two extra Apple vegetation are within the pipeline.

Apple projected final 12 months that producing its high-end iPhone 16 Professional and Professional Max fashions in India would deliver down prices by 10 per cent. Nonetheless, because of taxes and element prices, the retail worth of the gadgets would stay unchanged, in response to a report by The Financial Instances.

Make-in-US is a nasty concept for Apple

Analysts have warned that manufacturing iPhones within the US can be very costly.

iPhones made within the US may price greater than 3 times their present worth of round $1,000, Dan Ives, world head of know-how analysis at monetary providers agency Wedbush Securities, instructed CNN.

“You construct that (provide chain) within the US with a fab in West Virginia and New Jersey. They’ll be $3,500 (Rs 2.99 lakh) iPhones,” he stated, referring to fabrication vegetation, the place laptop chips powering digital gadgets are normally manufactured.

Apple must bear a value of $30 billion over three years to shift simply 10 per cent of its provide chain to the US, Ives added.

The Financial institution of America (BofA) forecasts that transferring iPhone manufacturing to the US would practically double the price of making the system, together with creating logistical complications.

“iPhone price can improve 25 per cent purely on greater labour price within the US,” BofA analysts led by Wamsi Mohan wrote in a notice to shoppers in April.

Mohan stated that the value of the iPhone 16 Professional, which prices $1,199 (Rs 1.03 lakh), may bounce 25 per cent primarily based on simply labour prices. A made-in-the-US iPhone 16 Professional may very well be priced at $1,500 (Rs 1.29 lakh).

As per the BofA analyst, the labour price for assembling and testing an iPhone in America can be $200 (Rs 17,098) per iPhone, an increase from $40 (Rs 3,420) in China.

Consultants say that Trump’s dream of constructing iPhones within the US would meet numerous challenges, together with discovering and using a US workforce and tariff prices that Apple must bear for importing components to America for remaining meeting.

Analysts and business watchers imagine Apple is unlikely to shift manufacturing of its iPhones to the US.

“It’s simply not a actuality that on the timeframe of imposing tariffs that that is going to shift manufacturing right here. It’s pie within the sky,” Jeff Fieldhack, analysis director at Counterpoint Analysis, instructed CNBC. 

Apple’s largest problem is that the US doesn’t have the identical workforce as China. “The military of thousands and thousands and thousands and thousands of human beings screwing in little screws to make iPhones, that type of factor goes to come back to America,” Commerce Secretary Howard Lutnick stated on CBS.

As per JP Morgan, the value of iPhones can be solely two per cent extra if the ultimate meeting have been accomplished in India as a substitute from China, elevating the gadgets’ price from $986 (Rs 84,293) to $1,008 (Rs 86,174). Nonetheless, a US-made iPhone would see a 30 per cent surge to $1,285 (Rs 1.09 lakh).

US tariffs on China stings Apple

Apple
has been scrambling to shift its manufacturing from China to India after Trump imposed 145 per cent tariffs on Chinese language imports to the US final month.

The iPhone maker has already ramped up manufacturing in India to keep away from Trump’s excessive tariffs. Apple shipped some 600 tonnes of iPhones value $2 billion from India to the US in March, as per Reuters. 

This week, the US and China have agreed to decrease tariffs on items traded between the 2 nations. America’s taxes on Chinese language imports will plunge to 30 per cent from 145 per cent, whereas China’s tariffs on some US imports will fall to 10 per cent from 125 per cent. The discount in tariffs imposed by the US on Chinese language items will deliver some reduction to Apple.

The US tariffs on India are far under China. In April, the Trump administration imposed 26 per cent taxes on Indian imports. America has since paused most duties for 3 months.

Trump’s inauguration in January has hit Apple with its shares dropping round 25 per cent of their worth because of issues concerning the affect on its provide chain from the US tariffs.

Nonetheless, “Made within the US” appears to be a pipe dream. In 2011, when the then US President Barack Obama requested the late Apple CEO Steve Jobs about making an iPhone in America, Jobs replied: “These jobs aren’t coming again.”

With inputs from businesses