Apple's plan to move its iPhone production operations from China to India is facing significant resistance, with experts suggesting that such a shift may not be as beneficial as it seems. Analysts argue that, although relocating assembly operations to India might reduce certain costs, it doesn’t fully address the issues arising from ongoing U.S.-China trade tensions and Apple’s complex global supply chain.

Craig Moffitt, an analyst from Cailianshe, has described Apple’s idea of shifting iPhone production to India as unrealistic. While he acknowledges that the move could help reduce some costs, especially with India’s lower labor rates, he believes it won’t resolve the larger problems at play. Moffitt emphasizes that the trade disputes between the U.S. and China impact both costs and sales, which will continue to plague Apple’s bottom line.

The Limitations of Shifting Assembly Without Changing the Supply Chain

Despite Apple’s potential savings on labor costs in India, Moffitt points out that the real challenge lies in the fact that most of the iPhone’s components are still manufactured in China. Shifting assembly to India will not resolve the broader supply chain issues Apple faces. This means that any efforts to avoid tariffs by moving production could be counteracted by the costs of sourcing parts from China.

U.S.-China Trade Tensions and Their Impact on Apple’s Bottom Line

Apple’s iPhone business is significantly tied to the U.S. market, where it generates the majority of its revenue. With escalating trade tensions between the U.S. and China, Apple faces the looming threat of higher tariffs. Moffitt believes that this could erode consumer purchasing power, resulting in a ‘buttery effect’ that negatively impacts the Cupertino-based firm’s revenue.

Apple’s reliance on China for manufacturing its iPhone components has placed the company in a difficult position, and it’s uncertain whether relocating assembly operations to India will offer meaningful relief from these pressures.

PHOTO: GETTY IMAGES

This article was created with AI assistance.