Apple Inc. has revealed a major shift in its manufacturing strategy, announcing that a significant portion of iPhones and other devices intended for the US market will no longer be produced in China. Instead, India and Vietnam will take the lead in manufacturing key Apple products, including iPhones, iPads, Apple Watches, and AirPods.
This strategic change comes as Apple faces increasing cost pressures, largely due to tariffs imposed under former President Donald Trump’s trade policies. While certain electronics received tariff exemptions, Apple estimates that these import duties could add nearly $900 million to its costs in the current quarter alone.
In a quarterly earnings call with investors, Chief Executive Tim Cook emphasized the company’s ongoing efforts to diversify its supply chain amidst escalating trade tensions between the US and China. He stated, “We do expect the majority of iPhones sold in the US will have India as their country of origin.” Cook also mentioned that Vietnam will lead the production of iPads, Macs, Apple Watches, and AirPods destined for the US market. However, China will remain the primary manufacturing base for Apple products intended for markets outside the US.
Read More: Apple’s valuation could soon hit $4 trillion, driven by the rise of Apple Intelligence
This transition marks a significant shift in Apple’s long-standing reliance on Chinese manufacturing, a practice once deemed indispensable by Cook. Industry experts view this move as a major change for Apple and global supply chains. Patrick Moorhead, CEO of Moor Insights & Strategy, noted, “This is a marked change from what Cook said a few years back when he said that only China can build iPhones.”
Apple’s decision comes as global businesses struggle with the volatile landscape of international trade. While the Trump administration had urged companies like Apple to bring manufacturing back to the US, tariffs were used as leverage. Although Apple shares initially dipped following tariff announcements, the government later softened its stance by exempting certain electronics from the duties.
Despite the challenges posed by trade tensions, Apple has reported steady financial performance, with first-quarter 2025 revenues rising by 5% year-on-year, reaching $95.4 billion. Cook also highlighted Apple’s continued investment in the US, noting plans to inject $500 billion across several states over the next four years, balancing its global production strategy with domestic investments.
In comparison, Amazon, another tech giant, reported strong performance despite tariff impacts. Its North American e-commerce business grew by 8% in the last quarter, and overall revenues surged by 9%, reaching $155.7 billion. Profits jumped more than 60%, reaching nearly $17 billion. Amazon CEO Andy Jassy acknowledged the challenges of tariff uncertainty but expressed confidence in Amazon’s ability to weather the storm due to its scale and diverse product offerings.
