Apple CEO Tim Cook announced intentions of shifting iPhone manufacture from China to India on Thursday. He warned of additional tariff-related charges of roughly $900 million this quarter amid a heated Sino-U.S. trade war. The tech giant’s shares plummeted nearly three percent in premarket trading after the iPhone manufacturer reduced its share buyback program.
Cook stated that he anticipated “the majority of iPhones sold in the US will have India as their country of origin,” given that some iPhone manufacture has already shifted to India in recent years. The Cupertino, California-based company now produces more than 90 percent of its goods in China.
To lessen the effects of US President Donald Trump’s trade war, Apple announced diversifying its global supply chain beyond China.
Cook said that most Apple products for non-US markets will continue to be manufactured in China. Vietnam would supply practically all iPads, Macs, Apple Watches, and AirPods sold in the United States, he stated.
“We have a complex supply chain. There’s always risk in the supply chain,” Cook said. “What we learned some time ago was that having everything in one location had too much risk with it.
“Assuming the current global tariff rates, policies, and applications do not change for the balance of the quarter and no new tariffs are added, we estimate the impact to add $900 million to our costs,” Cook told a quarterly earnings call.
Although iPhones have been spared the worst tariffs due to the Trump administration’s exemption of cellphones and other devices with semiconductors from reciprocal tariffs on China, Chinese-made goods are still subject to a minimum 20% duty, Apple CEO revealed.
Following the earnings call, Apple’s shares dropped by about 4 percent in after-hours trading, indicating investor apprehension over the uncertain future presented by supply chain instability and tariffs.
Apple posted strong financial results for the January to March quarter, despite the tariff headwinds. Compared to the same period in 2024, revenue increased 5 percent in the first three months of this year to $95.4 billion, above analysts’ projections. iPhone sales increased by 2 percent to $46.8 billion.
“For the March quarter, we had a limited impact from tariffs as we were able to optimize our supply chain and inventory,” Cook said.
However, its sales in the Greater China area, which includes Taiwan and Hong Kong, decreased to $16 billion, or roughly 2 percent less than the year before. The decline coincides with growing rivalry for Apple from domestic smartphone manufacturers in China, its second-largest market.
Although experts say it is almost impossible, the Trump administration is keen to persuade Apple to start producing iPhones in the US.
Wedbush Securities’ global head of technology research, Dan Ives, previously stated that if iPhones were produced in the US, their cost may more than quadruple to almost $3,500.