Apple to shift U.S. iPhone production out of China to avoid tariffs: report

Apple wants to shift the production of iPhones destined for the U.S. from China to India to avoid President Trump’s tariffs, but it will likely take years for the iPhone maker to transition production fully.

Last week, reports claimed Apple wanted to produce all U.S. iPhones in India. The company has a goal of making the roughly 60 million iPhones sold to Americans each year in India by 2026.

However, Bloomberg’s reliable Apple reporter Mark Gurman wrote in his April 27th Power On newsletter that it likely won’t happen until 2027. Even if Apple does manage to shift the majority of U.S. iPhone manufacturing to India, Gurman says not everything will be covered. That means some products will likely still face higher tariff-related costs.

According to Gurman, Apple currently has enough manufacturing capacity in India to meet roughly one-third of annual U.S. iPhone demand. However, the company also has upcoming factories in India, including one that’s set to be the second-largest iPhone factory in the world. These upcoming factories should help Apple make enough iPhones in India to cover U.S. demand, effectively avoiding the tariffs.

Despite that, Gurman noted that Apple is also working on “two major new iPhone models” to celebrate its 20th anniversary (the original iPhone came out in 2007). These new models include Apple’s first foldable and a more glass-centric Pro iPhone model.

Gurman pointed out that Apple has never produced a major new product design outside of China the first time around. Coupled with the increased complexity of the new models and the need for new parts and production techniques, Gurman posits that Apple will want to build those new models in China first, even if it manages to build manufacturing capacity in other countries.

That could mean some of the most anticipated new iPhone models in years will have hefty, tariff-inflated price tags in the U.S. At the same time, the tariff situation changes so frequently and rapidly that it’s hard to say with any certainty how things will look in a few days or weeks, let alone years from now.

Source: Bloomberg