Apple is undertaking a major restructuring of its global supply chain, with CEO Tim Cook announcing that India will become the primary production base for iPhones destined for the US market, while Vietnam will manufacture most iPads, Apple Watches, and AirPods sold in America. This strategic realignment comes as the company faces an estimated $900 million in additional costs from US import tariffs this quarter, despite recent exemptions for key electronics.
The transition marks a significant departure from Apple’s longstanding reliance on Chinese manufacturing. During an investor call, Cook outlined plans that will see Indian factories assume responsibility for the majority of US-bound iPhone production, while Vietnam’s expanded facilities will handle nearly all other Apple products for the American market. China will maintain its role as the manufacturing hub for devices sold in other global markets during what is expected to be a multi-year transition period.
Financial disclosures reveal the complexity of this operational shift. While Apple reported a 5% year-over-year revenue increase to $95.4 billion for the first quarter, demonstrating resilience to current trade disruptions, the company faces substantial relocation costs. These include its previously announced $500 billion US investment plan and billions more required to establish new manufacturing ecosystems in India and Vietnam. Industry analysts note these expenditures may pressure profit margins in coming quarters.
The move responds to multiple pressures, including the Trump administration’s persistent calls for US tech manufacturing repatriation and broader geopolitical tensions. Amazon CEO Andy Jassy reported similar tariff-related challenges, though his company posted strong results with 9% sales growth to $155.7 billion, suggesting major tech firms are finding ways to navigate the changing trade landscape.
Supply chain experts emphasize the enormity of Apple’s task in replicating China’s manufacturing infrastructure elsewhere. Building equivalent production capacity requires not just physical factories, but entire ecosystems of suppliers, skilled labor forces, and logistical networks. Industry analyst Patrick Moorhead described Apple’s progress as “impressive” compared to previous assertions that iPhone production could only occur in China, while cautioning that full operational capacity in new locations may take years to achieve.
