The U.S. market will always hold paramount significance for Apple because it generates the highest smartphone sales revenue, meaning that with the impending tariffs kicking in, the purchasing power will erode, leading to a buttery effect that will negatively affect the Cupertino firm’s bottom line. To obtain some relief from this upcoming ordeal, Apple was previously reported to shift iPhone production from China to India to avoid any unnecessary levies. Unfortunately, one analyst calls this approach ‘unrealistic’ and says that shifting assembly work to India will not shield the company from other looming expenses.
Shifting iPhone production from China to India will not be beneficial for Apple, as the manufacturing of various components will still be limited to a single region
As reported by MyDrivers, Chinese financial outlet Cailianshe mentions that analyst Craig Moffitt suggested that Apple shifting iPhone production from China to India was unrealistic. His reasoning is that the trade skirmishes between the U.S. and China are a two-front affair where the elements of costs and sales are both affected. While Moffitt states that moving production to India might reduce the cost factor, there are other problems at play. It is estimated that iPhone production in India accounts for 20 percent of global shipments, meaning there is untapped potential in this region.
Apple can also leverage the low labor cost to maintain its healthy margins, but Moffitt believes that shifting iPhone assembly operations from China will not solve the tariff conundrum. After all, iPhone components will still need to be manufactured overseas, hinting that Apple’s supply chain will remain rooted in China for the foreseeable future. Assuming the California-based giant finds a way to scale past this obstacle, authorities are making darn sure that the firm works up a sweat in transporting the necessary paraphernalia outside of China.
We recently reported that Chinese personnel are blocking Apple’s supply chain from moving important machinery overseas, forcing these equipment manufacturers to devise creative ideas to achieve this goal. The assembling part of bringing down cost could be achieved in the long run, but shifting the production of other components will be a Herculean challenge, as there are hundreds of parts found in a single iPhone.
News Source: MyDrivers
