Wedbush: Trump's pressure is unlikely to be effective, and Apple's iPhone production is difficult to leave China and India
Wedbush analysts stated that despite Trump's pressure to stop building factories in India, Apple and its manufacturing partners may still keep iPhone production centers in India and China. The analysis pointed out that Apple faces an uncertain tariff environment in China, making the push for production in India a wise move. Although Trump hopes Apple will increase production in the United States, producing iPhones in the U.S. is considered impossible in the short term. Analysts expect the Trump administration to exert greater pressure, but reaching an agreement with India could improve Apple's production situation
According to the Zhitong Finance APP, Wedbush stated that despite President Trump pressuring to stop building factories in India, Apple Inc. (AAPL.US) and its manufacturing partners may keep the iPhone production centers in India and China.
The analysts wrote in a report to clients: "In the past few weeks, all our work across the Asian supply chain has led us to be highly confident that, considering the uncertain tariff environment Apple faces in China, actively pushing for production in India is a very wise strategic move. Although Apple has announced a $500 billion investment in the U.S. (possibly more), mainly in AI-driven projects, we believe it is impossible to produce iPhones in the U.S. in the short term due to the inverted cost structure and Herculean supply chain logistics required for such projects."
Before this analysis was published, President Trump stated this week, "I have a little problem with Apple CEO Tim Cook." Trump told reporters during his trip to the Middle East: "He is building houses all over India. I don't want factories in India." Trump indicated that the outcome of this conversation would be that Apple would "increase production in the U.S.," but did not disclose specific details. Apple announced in February this year that it would invest $500 billion in the U.S. over the next four years.
While Wedbush analysts indicated that they expect the Trump administration to exert greater pressure to produce iPhones in the U.S. (White House Press Secretary Karine Jean-Pierre stated in April that President Trump believes iPhones can be produced in the U.S.), it is "impossible" for the tech giant headquartered in Cupertino, California.
The analysts added: "Those optimistic about Apple need to look ahead three months and assume that the Trump administration will reach an agreement with India next, which will further improve Apple's iPhone production situation heading into the fall."
