Most iPhones sold in US will be Made-in-India

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In a groundbreaking move, Apple CEO Tim Cook announced that, beginning in the June 2025 quarter, the majority of iPhones sold in the United States will be manufactured in India. This strategic shift comes amid escalating trade tensions between the US and China, alongside Apple’s ongoing efforts to diversify its manufacturing footprint. While Apple’s iPhone production in India has been ramping up over the years, this significant announcement signals India’s pivotal role in Apple’s global supply chain. Not only does this move mitigate the impact of the Trump administration’s tariff policies on Chinese imports, but it also highlights India’s growing importance as a manufacturing hub.

Tim Cook further revealed that Vietnam will be the country of origin for other Apple products like the iPad, Mac, Apple Watch, and AirPods sold in the US. The decision to shift production from China to India is part of Apple’s broader plan to safeguard against unpredictable tariffs and avoid retail price hikes in the US market.

1. Introduction to Apple’s Global Manufacturing Strategy

Apple, the tech giant that revolutionized the electronics industry, has long been a leader in innovation and product design. Founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in 1976, Apple has grown to be one of the most valuable companies globally. The company’s product range includes the iPhone, iPad, MacBook, Apple Watch, and AirPods, all of which have become integral parts of modern life. Over the years, Apple has diversified its operations, focusing not only on hardware design but also on software and services. In recent years, Apple’s manufacturing strategy has undergone a transformation, with the company gradually shifting production from its traditional manufacturing base in China to other countries such as India and Vietnam.

Apple’s revenue model is driven by both product sales and its services sector, which includes iCloud, the App Store, and Apple Music. The company’s massive global market presence and brand loyalty ensure consistent revenue streams, making it a leader in the tech space. Apple also benefits from a unique position in the venture capital world, with heavy investments in research and development, enabling continuous innovation.

2. Apple’s Shift in Manufacturing to India

2.1. Why India?

The decision to shift the majority of iPhone production to India is not without reason. Apple has been gradually increasing its manufacturing presence in India since 2017 through partnerships with contract manufacturers like Foxconn and the Tata Group. Initially focusing on entry-level iPhones, Apple has expanded production to include high-end models, such as the iPhone 13 and iPhone 14.

The US-China trade war largely drives this shift, as the tariffs imposed by the Trump administration on Chinese imports now impact Apple’s bottom line. The reciprocal tariffs on Chinese-made goods have made it expensive for Apple to continue relying on China for its iPhone manufacturing. India, on the other hand, offers a favorable tariff structure and an emerging ecosystem that supports Apple’s expansion. Additionally, India has become a crucial player in Apple’s growth strategy, with the company surpassing INR 1 lakh crore in iPhone exports in 2024.

2.2. Apple’s India Manufacturing Footprint

Apple’s manufacturing partners, including Foxconn and Tata, have been ramping up their production capacities in India. These factories cater to domestic needs and also fulfill demand in key international markets like the United States. In fact, the company has been airlifting large quantities of iPhones from India to the US to meet the growing demand.

With more than 600 tonnes of iPhones, equivalent to about 1.5 million units, being airlifted since March, Apple is quickly adjusting to the evolving trade landscape. This is just the beginning, as Apple plans to significantly increase production capacity in the coming years.

3. The Impact of Tariffs on Apple’s Strategy

3.1. Navigating US Tariff Policies

Apple has been vocal about the impact of US tariffs on its products. In a recent earnings call, Tim Cook stated that the 145% tariff on Chinese imports would cost Apple approximately $900 million in the June 2025 quarter. This financial burden has accelerated Apple’s decision to shift its production base away from China, marking India as the primary country of origin for the iPhones sold in the US.

3.2. Vietnam’s Role in Apple’s Production

India will primarily manufacture iPhones sold in the US, while Vietnam will take over the production of other key Apple products, including iPads, MacBooks, Apple Watches, and AirPods. Vietnam’s lower labor costs and favorable trade agreements with the US make it an attractive alternative to China. As a result, Apple is securing its supply chain against both tariff risks and the potential for retail price hikes in the US market.

4. Apple’s Record-Breaking Sales in India

4.1. India: A Key Growth Market

India has emerged as a key market for Apple. In the December 2024 quarter, Apple reported record-breaking sales in India, with iPhones becoming the top-selling smartphone model in the country. Despite the fierce competition from local manufacturers like Xiaomi and Samsung, Apple has managed to carve out a substantial share of the Indian market.

In FY 2024-25, Apple’s exports from India surged, with the company assembling $22 billion worth of iPhones in the country. India now accounts for 8.4% of global iPhone production, a significant increase from previous years. This growth is a testament to Apple’s deepening ties with India and its ability to leverage the country’s vast manufacturing and labor capabilities.

4.2. Setting Up Retail Stores in India

In addition to ramping up production, Apple also plans to expand its physical presence in India. Tim Cook announced that new Apple retail stores would be opening in major Indian cities, including Bengaluru, Pune, Delhi NCR, and Mumbai. This expansion is set to further cement Apple’s position in the Indian market and provide more opportunities for consumers to experience its products and services firsthand.

5. The Road Ahead: What’s Next for Apple?

5.1. Expansion of iPhone Manufacturing in India

As Apple continues to focus on India, the company plans to further enhance its iPhone production capacity. Apple’s contract manufacturers are already expanding their factories in Tamil Nadu and other parts of India. This push is expected to create thousands of new jobs and boost the local economy.

5.2. Maintaining China as a Key Manufacturing Hub

While India is taking over a significant portion of iPhone production, China will remain a core manufacturing base for Apple. The country still accounts for over 76% of Apple’s global phone production. However, with the ongoing trade tensions, Apple is strategically moving to diversify production across countries to safeguard its business interests in an increasingly uncertain global landscape.

6. Learning for Startups and Entrepreneurs

1. Embrace Global Diversification: Apple’s shift to India highlights the importance of diversifying manufacturing and supply chains to mitigate risks. Startups can learn the value of not relying on a single production location, especially in times of political or economic instability.
2. Adapting to Market Dynamics: Apple’s ability to adapt to changing market conditions, such as the US-China trade conflict, shows how important it is for startups to be flexible and responsive to external challenges. Entrepreneurs should be prepared to pivot their strategies when necessary.
3. Building Strong Partnerships: Apple’s success in India is attributed to its strategic partnerships with contract manufacturers like Foxconn and Tata. Building strong, reliable partnerships is crucial for any startup looking to scale operations in a global marketplace.

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