Apple has recently conducted a significant airlift of approximately 600 tonnes of iPhones, or nearly 1.5 million units, from India to the United States. This move, reported by Reuters, is part of the company's strategy to stay ahead of the increasing import duties imposed on Chinese-made goods. The company has been ramping up its production efforts in India as part of a broader initiative to reduce its reliance on China, especially in the wake of new tariffs introduced by the US government under former President Donald Trump.
The rationale behind this rapid airlift of iPhones is to avoid the higher tariffs on Chinese imports, which have risen sharply to 145%. Analysts noted that such a hike could significantly increase the price of iPhones in the US, where roughly 80% of the devices are made in China, according to Counterpoint Research. The tariff hike, along with rising production costs, has put Apple in a position where it is attempting to manage costs and maintain a steady supply of iPhones to the US market by quickly transporting iPhones made in India.
India has become a key part of Apple's broader long-term strategy to reduce its dependence on Chinese factories. As per reports from Bloomberg, Apple is shifting a significant portion of its production to India, where its suppliers are in the process of building what will become the world’s second-largest iPhone factory. This facility is expected to supply a large number of iPhones to the US market in the coming years. Despite these efforts, Apple remains far from fully moving its production out of China. The company's network of suppliers and trained workers in China continues to be a vital component of its global manufacturing capabilities, particularly for high-scale production.
However, the push for Apple to build iPhones in the US has intensified. The White House has called for Apple to shift more of its production to American soil, with the Trump administration even pointing to the company’s planned $500 billion investment in the US over the next four years as evidence of the feasibility of bringing manufacturing back home. Yet, experts argue that this would be a highly complex and challenging task.
Apple faces significant obstacles in setting up full-scale iPhone production in the US. One of the primary issues is the lack of a sufficient workforce of trained engineers and factory workers, something that is easily found in China but not readily available in the US. Apple’s production lines, known as FATP (Final Assembly, Test, and Pack-out) facilities, are massive operations with hundreds of thousands of workers. These factories are essentially self-contained cities, as exemplified by Apple’s factory in Zhengzhou, China, which has earned the nickname “iPhone City” due to its size and facilities.
Matthew Moore, a former Apple manufacturing engineer, described these factories as comparable to cities like Boston, stating that an entire city would need to stop everything to shift its focus to iPhone assembly. Furthermore, many of the technical skills required to operate these factories—such as machine operation and engineering support—are not easily found in the US. Tim Cook, Apple’s CEO, explained in 2017 that Apple does not rely on China solely for cheap labor, but for the skilled workforce that exists in one place, something that the US cannot replicate at the required scale.
While some have proposed the idea of building fully automated factories in the US, experts believe this is not a realistic solution in the near future. Even China, which has long been a leader in manufacturing, has not been able to fully automate iPhone production. The frequent changes in iPhone models make automation challenging, as each design update requires new machines and tools, and assembly lines need to be frequently reconfigured. A source familiar with Apple's supply chain noted that this rapid pace of change complicates efforts to build fully automated production lines.
In light of these challenges, India remains Apple’s best option for expanding its manufacturing capabilities outside China. The country is already producing about 35 million iPhones a year, and while this is still a fraction of the overall demand, it represents a significant contribution to Apple’s ability to meet US market needs. While Apple also has smaller production lines in countries like Brazil, these mainly focus on older and lower-cost models. As a result, India is expected to play a crucial role in supplying iPhones for the US market, although it will take time to match the speed and scale of production seen in China.
Apple’s ongoing shift to India reflects a strategic effort to diversify its supply chain and mitigate the risks posed by escalating trade tensions, tariffs, and geopolitical uncertainties. As the company continues to navigate the complexities of global production, its efforts to balance cost management with meeting market demands will likely define its approach for the foreseeable future.
