We know that the US and China are currently experiencing a moment of tension, with a real trade war escalating between the two powers.
With most iPhones currently being manufactured in China, it is possible that either these models land on the US market with an increase (due to the Trump tariff barrier ) or that the apple chooses to keep the same value as before, which it would lose some of its profits.
Therefore, the Cupertino giant may end up adopting another strategy: manufacture the iPhone in India.
Currently, Apple already owns factories in the country, however, they are focused only on production for the Indian market itself – but according to recent information published by Bloomberg, Foxconn’s production lines in India have sufficient capacity to handle the north demand -American.
According to an executive at Hon Hai Precision Industry Co. (also known as Foxconn):
The company’s main manufacturing partner, based in Cupertino, California, has enough capacity to make all iPhones bound for the US outside China, if necessary.
The director of the semiconductor division Young Liu complemented at a meeting with investors held on Tuesday (11) saying that the manufacturer will fully support Apple should it need to readjust its production because of the US-China trade dispute:
Twenty-five percent of our production capacity is outside China and we can help Apple meet its needs for the US market. We have enough capacity to meet Apple’s demand.
The company must respond quickly, and possibly rely on localized manufacturing in response to the commercial war – as well as predicting the need to build a base in the American state of Wisconsin two years ago, Liu added.
Recent information suggests that Pegatron’s rival product maker will be responsible for manufacturing MacBooks and iPads – formerly assembled in China – later this month.
What if they boycotted Apple?
It may be that Apple ends up suffering a major loss because, because of the trade war, many Chinese are already organizing to boycott the brand in their country, a move that comes as retaliation for the recent US decision on Huawei’s “banishment”.
According to Goldman Sachs, in this scenario, at worst, Apple may end up with a 29% drop in global profits – this taking into account a possible ban on iPhone sales in China (something that Apple CEO Tim Cook, it seems unlikely to happen, after all, the founder of Huawei has made it clear that he does not want any kind of retaliation ).