Apple reported a profit of US$24.8 billion for the first quarter of 2025, exceeding expectations due to strong iPhone sales.

The company warned that US tariffs could increase costs by US$900 million in the current quarter.

During an earnings call, CEO Tim Cook noted that while the impact of tariffs was limited earlier this year, they are now disrupting supply chains.

He mentioned that most iPhones sold in the US are expected to be produced in India as Apple shifts production to reduce tariff risks.

Cook also stated that nearly all iPads, Macs, Apple Watches, and AirPods sold in the US will soon be manufactured in Vietnam.

Analysts warned that moving production could raise costs, affect profits, or lead to higher prices for consumers.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ Apple’s manufacturing shift represents a significant strategic pivot years in the making

Apple’s current shift to India isn’t a sudden reaction but represents years of supply chain evolution forced by geopolitical pressures.

The company previously relied on China for approximately 90% of its product manufacturing, creating significant vulnerability to trade tensions 1.

This dependency was highlighted during previous tariff rounds where Apple scrambled for exemptions after warning that tariffs would lead to higher consumer prices and reduced competitiveness for American companies 2.

The scale of this transition is enormous. Currently, about 80% of iPhones sold in the US are produced in China, making the planned shift to Indian manufacturing by 2026 one of the largest supply chain redirections in consumer electronics history 3.

Apple’s strategic inventory buildup ahead of anticipated tariffs demonstrates how companies with sophisticated supply chains attempt to cushion short-term impact while executing longer-term manufacturing relocations 4.

2️⃣ Geographical manufacturing shifts come with significant economic tradeoffs

The manufacturing capabilities Apple leverages in China weren’t built overnight, and replicating them elsewhere presents substantial challenges.

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