US President Donald Trump's push on tariffs on imported iPhones will make the device expensive for Americans due to higher duty along with higher cost of production, analysts and experts said on Friday.
Neil Shah, vice president of research at market research and analysis firm Counterpoint Research, said that relocating Apple's manufacturing ecosystem to USA in near to mid term is not only impractical but also infeasible as Apple's supply chain is completely Asia-heavy around China, India and Vietnam.
"It's not just about Foxconn opening a factory in the USA but also the supply chain has to relocate closer to the USA, which is beyond question. Second, even if Apple's partner starts assembling in the USA, it will be at least 10-20% more expensive. So it would eventually be as expensive as the 255 tariff," he said.
Trump has again pushed for the manufacturing of iPhones in the US and not in India or anywhere else for sale in the country.
"I have long ago informed Tim Cook of Apple that I expect their iPhone's that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the US," Trump posted on Truth Social.
Earlier, Trump had specifically expressed reservation on expansion of iPhone production in India.
An analysis by Global Trade Research Initiative (GTRI) estimates that Apple, through its software, design, and brand, claims the lion's share of around $450 in each iPhone sold for $1,000.
US component makers such as Qualcomm and Broadcom add another $80, Taiwan earns $150 for chip manufacturing, South Korea adds $90 for OLED screens and memory chips, and Japan contributes $85, mainly via camera systems.
Other countries like Germany, Vietnam, and Malaysia account for a modest $45 through smaller parts while India gets only $30, of which a large part is paid back through production linked incentive schemes.
"In India, assembly workers make roughly $230 per month. In contrast, US minimum wage laws in states like California mean monthly labour costs could rise to $2,900 -- a 13-fold increase. The cost of assembling each iPhone would jump from $30 to about $390. Apple's profit per device would drop from $450 to around $60, unless offset by price hikes," GTRI Founder Ajay Srivastava said.
He said that if Apple's assembly moves out, India will be forced to stop propping up shallow assembly lines and instead invest in deeper manufacturing -- chips, displays, batteries, and beyond.
"The cost to Apple's margins is real -- but so is the gain in domestic employment, economic rebalancing, and supply chain resilience. Even India, once the dust settles, may benefit by being pushed toward deeper, more valuable manufacturing," Srivastava said.
Shah said if not China, then India remains the only potential manufacturing destination for Apple as the ecosystem is mushrooming aided by lower cost English speaking skilled labour, world class software talent, favourable government policies such as PLI (production linked incentive) and a huge domestic consumption market.
"USA's request to Apple could also be a way to gain leverage against India in negotiations as they understand India needs marquee companies such as Apple to catalyse and build a domestic supplier ecosystem in this strong push for Make in India from semiconductors to finished electronics products," he said.
Cook had previously stated that Apple will source majority of iPhones sold in the US from India in the June quarter, while China will produce the vast majority of the devices for other markets amid uncertainty over tariffs.
India-made iPhones are assembled in Taiwanese contract manufacturer Foxconn's factory in Tamil Nadu. Tata Electronics, which runs Pegatron Corp's operations in India, is the other key manufacturer. Tata and Foxconn are building new plants and adding production capacity to raise iPhone production.
Apple assembled 60% more iPhones, worth an estimated $22 billion, in India in the year ended March 2025.
Foxconn has also started manufacturing Apple Airpods in Telangana for exports.
According to an analysis by S&P Global, iPhone sales in the US were 75.9 million units in 2024, with exports in March from India at 3.1 million units, suggesting a need to double shipments either through new capacity or redirecting shipments bound for the domestic market.
"Apple finds itself once again in the crosshairs of a belligerent 'America First' policy stance -- navigating the tightrope between inflationary pressures and absorbing costs. While the tariff see-saw is likely to continue, planting more seeds for US manufacturing, India's role as a critical cog in Apple's global supply chain will only grow stronger," Cyber Media Research, Industry Research Group, Vice President Prabhu Ram said.
Neil Shah, vice president of research at market research and analysis firm Counterpoint Research, said that relocating Apple's manufacturing ecosystem to USA in near to mid term is not only impractical but also infeasible as Apple's supply chain is completely Asia-heavy around China, India and Vietnam.
"It's not just about Foxconn opening a factory in the USA but also the supply chain has to relocate closer to the USA, which is beyond question. Second, even if Apple's partner starts assembling in the USA, it will be at least 10-20% more expensive. So it would eventually be as expensive as the 255 tariff," he said.
Trump has again pushed for the manufacturing of iPhones in the US and not in India or anywhere else for sale in the country.
"I have long ago informed Tim Cook of Apple that I expect their iPhone's that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the US," Trump posted on Truth Social.
Earlier, Trump had specifically expressed reservation on expansion of iPhone production in India.
An analysis by Global Trade Research Initiative (GTRI) estimates that Apple, through its software, design, and brand, claims the lion's share of around $450 in each iPhone sold for $1,000.
US component makers such as Qualcomm and Broadcom add another $80, Taiwan earns $150 for chip manufacturing, South Korea adds $90 for OLED screens and memory chips, and Japan contributes $85, mainly via camera systems.
Other countries like Germany, Vietnam, and Malaysia account for a modest $45 through smaller parts while India gets only $30, of which a large part is paid back through production linked incentive schemes.
"In India, assembly workers make roughly $230 per month. In contrast, US minimum wage laws in states like California mean monthly labour costs could rise to $2,900 -- a 13-fold increase. The cost of assembling each iPhone would jump from $30 to about $390. Apple's profit per device would drop from $450 to around $60, unless offset by price hikes," GTRI Founder Ajay Srivastava said.
He said that if Apple's assembly moves out, India will be forced to stop propping up shallow assembly lines and instead invest in deeper manufacturing -- chips, displays, batteries, and beyond.
"The cost to Apple's margins is real -- but so is the gain in domestic employment, economic rebalancing, and supply chain resilience. Even India, once the dust settles, may benefit by being pushed toward deeper, more valuable manufacturing," Srivastava said.
Shah said if not China, then India remains the only potential manufacturing destination for Apple as the ecosystem is mushrooming aided by lower cost English speaking skilled labour, world class software talent, favourable government policies such as PLI (production linked incentive) and a huge domestic consumption market.
"USA's request to Apple could also be a way to gain leverage against India in negotiations as they understand India needs marquee companies such as Apple to catalyse and build a domestic supplier ecosystem in this strong push for Make in India from semiconductors to finished electronics products," he said.
Cook had previously stated that Apple will source majority of iPhones sold in the US from India in the June quarter, while China will produce the vast majority of the devices for other markets amid uncertainty over tariffs.
India-made iPhones are assembled in Taiwanese contract manufacturer Foxconn's factory in Tamil Nadu. Tata Electronics, which runs Pegatron Corp's operations in India, is the other key manufacturer. Tata and Foxconn are building new plants and adding production capacity to raise iPhone production.
Apple assembled 60% more iPhones, worth an estimated $22 billion, in India in the year ended March 2025.
Foxconn has also started manufacturing Apple Airpods in Telangana for exports.
According to an analysis by S&P Global, iPhone sales in the US were 75.9 million units in 2024, with exports in March from India at 3.1 million units, suggesting a need to double shipments either through new capacity or redirecting shipments bound for the domestic market.
"Apple finds itself once again in the crosshairs of a belligerent 'America First' policy stance -- navigating the tightrope between inflationary pressures and absorbing costs. While the tariff see-saw is likely to continue, planting more seeds for US manufacturing, India's role as a critical cog in Apple's global supply chain will only grow stronger," Cyber Media Research, Industry Research Group, Vice President Prabhu Ram said.
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