Trump impact: ‘Made in India’ iPhones to dominate US market in Q2
Virendra Pandit
New Delhi: The Americans buying iPhones this second quarter (April-June 2025) have originated in India, not in China, as Beijing struggles to keep its nose above waters in the ongoing trade war against Washington, which has forced multinational companies to follow the “China+One” policy and shift their operations to other countries.
The company’s decision came amid the US-China trade and tariff war. The media reported on Friday that Apple warned of a USD 900 million tariff hit and decided to shift its supply chain from China to India and Vietnam.
Apple shares were down 3.8 percent after the company released quarterly results.
During Apple, Inc.’s second-quarter earnings call, its CEO Tim Cook said the company made quarterly records in several countries, including India. It, however, recorded the seventh straight quarter of sales decline in China where it produced the largest volume of iPhones for years.
He announced that India will become the primary production hub for US-bound iPhones in the coming quarter, amid ongoing trade uncertainties with China.
While Apple will source the majority of the iPhones sold in the US from India in the June quarter, China will produce majority of the devices for other markets.
Apple said the company expects low-to-mid single-digit revenue growth during its third quarter, which is in line with analyst expectations of 4.28 percent growth to USD 89.45 billion. But it predicted a hit to gross margins, which it said will be 45.5 percent to 46.5 percent in the third quarter, which is below analysts’ estimates of 46.58 percent.
Cook said that Apple saw “limited impact” from tariffs during the second quarter as the company shifted its supply chains and inventory.
But for the second quarter ending in June, “assuming the current global tariff rates, policies and applications do not change for the balance of the quarter and no new tariffs are added, we estimate the impact to add USD 900 million to our cost.”
He said the majority of iPhones sold in the U.S. in the current quarter will come from India, and the majority of iPads, Macs and Apple Watches will come from Vietnam, after the company spent extra money to build products ahead of time during the April-ended first quarter. The vast majority of Apple products for markets outside the U.S. will continue to come from China.
“We have a complex supply chain. There’s always risk in the supply chain,” he said. “What we learned some time ago was that having everything in one location had too much risk with it.”
The Trump administration has so far spared electronics from tariffs, but Washington has signalled that some levies could come in the weeks ahead.
The uncertainty has sent shares of Apple, which makes 90 percent of its products in China, down about 15 percent this year, wiping off more than USD 600 billion from its market value.
He said that iPhone inventory levels at the beginning and end of the second quarter were comparable, meaning there was no large inventory buildup over the period. The handset sales were boosted by the iPhone 16e, the company’s USD 599 mid-market model that contains its first-ever custom modem chip.
The iPhone 16 is Apple’s most inexpensive model but has a sufficiently powerful processor to run all of the company’s newest AI features.
Apple said sales in its Greater China segment fell to USD 16 billion, better than analyst expectations of USD 15.9 billion. In China, Apple has faced especially tough competition from domestic makers such as Huawei and Xiaomi and has not yet rolled out key AI features it announced nearly a year ago. Apple now has more than 1 billion paid subscriptions on its platform.
