Apple's Strategic Shift: Majority of iPhones in the US to Come from India

Apple's Production Plans Amid Tariff Uncertainties

New Delhi: Apple plans to source most of the iPhones sold in the United States from India during the upcoming June quarter, while China will remain the primary production hub for other global markets, according to a senior executive's statement on Friday.

During the earnings call for the second quarter, Apple CEO Tim Cook highlighted that the company achieved record sales in various countries, including India.

However, Apple faced its seventh consecutive quarter of declining sales in China, where it traditionally manufactures the highest number of iPhones.

Cook noted, "For the June quarter, we anticipate that the majority of iPhones sold in the US will originate from India, while Vietnam will be the source for nearly all iPads, Macs, Apple Watches, and AirPods sold in the US. China will continue to supply the majority of products sold outside the US."

An analysis by S&P Global revealed that Apple sold 75.9 million iPhones in the US in 2024, with exports from India reaching 3.1 million units in March. This indicates a need for Apple to double its shipments, either by increasing capacity or redirecting shipments intended for the domestic market.

The report from S&P Global Market Intelligence stated that a significant portion of Apple's Indian exports is directed towards the US, accounting for 81.9% of the phones exported in the three months leading to February 28, 2025. This figure surged to 97.6% in March 2025, reflecting a 219% increase in exports, likely in anticipation of higher tariffs.

Cook also mentioned that Vietnam will be the primary source for nearly all iPads, Macs, Apple Watches, and AirPods sold in the US.

He explained that for the June quarter, most of Apple's tariff exposure is at a rate of 20%, applicable to imports into the US from China.

Additionally, an extra 125% tariff was announced in April for certain product categories imported from China, affecting some of Apple's US Apple Care and accessories businesses, bringing the total tariff rate for these products to at least 145%.

Cook clarified that most of Apple's products, including iPhones, Macs, iPads, Apple Watches, and Vision Pro, are currently exempt from the global reciprocal tariffs introduced in April, as the Commerce Department has initiated a Section 232 investigation into semiconductor manufacturing equipment and related products.

He estimated that if current global tariff rates and policies remain unchanged for the rest of the quarter, the impact on costs could reach USD 900 million.

In the second quarter ending March 29, 2025, Apple reported a 5% increase in revenue, totaling USD 95.35 billion, up from USD 90.75 billion in the same quarter last year, primarily driven by growth in services, Mac, and iPad sales.

Sales in the Americas rose by approximately 8% to USD 40.31 billion, while Europe saw a 1.3% increase to USD 24.45 billion. Japan experienced a 16.54% growth to USD 7.29 billion, and the rest of the Asia Pacific region, including India, grew by 8.4% year-on-year during the reported quarter.

Market research firm Counterpoint Research indicated that Apple achieved its highest-ever shipment volume in India during the March 2025 quarter, with a 29% year-on-year growth.

In contrast, sales in Greater China declined by 2.2% to USD 16 billion from USD 16.37 billion year-on-year during the March 2025 quarter.

Regarding retail expansion, Cook announced the opening of two new Apple stores during the quarter.

"We are also excited about a new retail store in the UAE, the launch of the online store in Saudi Arabia, and additional retail locations in India later this year," Cook added.

iPhone sales saw a slight decline of about 2% to USD 46.84 billion year-on-year, down from USD 45.96 billion in the March 2024 quarter.

Conversely, Apple Mac sales increased by 6.6% to USD 7.94 billion, iPad sales rose by approximately 15% to USD 6.4 billion, and services sales grew by 11.63% to USD 26.64 billion year-on-year during the quarter.

Sales from Apple's wearables, home, and accessories segment experienced a decline of about 5% to USD 7.52 billion during the March 2025 quarter compared to USD 7.91 billion in the previous year.

In the second quarter, Apple released iOS 18.4, which expanded Apple Intelligence to more languages, including French, German, Italian, Portuguese, Spanish, Japanese, Korean, and Simplified Chinese, as well as localized English for Singapore and India.