Why Moving iPhone Manufacturing From Asia To US Is Not Easy

US President Donald Trump had a "little problem" with Tim Cook, after his company Apple said it would be moving a big chunk of its iPhone production for the US market from China to India. Trump said he was "not interested" in Tim Cook's plans and wanted the company to build in the United States. He suggested that Apple could build in India "to take care of India", but made it clear that he was not okay with Made-in-India iPhones being sold in the US market. "We're not interested in you building in India... we want you to build here, and they're (Apple) going to be upping their production in the United States."

His statement came after the Apple CEO's announcement that India will be the primary source of iPhone manufacturing for the US in the June quarter, while China will produce for other markets amid tariff uncertainties.

If Tim Cook complies with Trump's plan, the US President's "little problem" might translate into a big problem. Moving iPhone manufacturing from Asia to America is not easy.

Cost, Scale, Skill And Infra

The US doesn't have an Apple smartphone production facility, and most of its phones are assembled in China, while facilities in India produce around 40 million units per year - about 15 per cent of Apple's annual output.

Trump wants the technology giant to up its production in the United States as part of his push for local manufacturing. However, the cost of labour and manufacturing in India and China is far cheaper than in America.

It's not just the cost, it's also a combination of scale, skills and infrastructure. The complex manufacturing process behind the sought-after phones involves more than 1,000 components sourced from all over the world.

In 2004, Tim Cook led Apple's shift to foreign manufacturing, cutting costs and providing the scale necessary to produce some of its best-selling tech products.

"Making Apple products requires state-of-the-art machines and lots of people who know how to run them. In the US, you could have a meeting of tooling engineers, and I am not sure we could fill the room," Tim Cook said at a 2017 conference in China. "In China, you could fill multiple football fields."

Over the years, Apple searched for ways to diversify its supply chains away from China to reduce geopolitical risks and capitalise on emerging production hubs. India, followed by Vietnam, was the shining star of the hunt.

Apple increased its production in India in March and airlifted a record $2 billion worth of iPhones. It leveraged Foxconn and Tata Electronics to meet the demand surge, reflecting companies' efforts to sidestep hefty tariffs on China.

Union Minister Ashwini Vaishnaw had in April announced that iPhones worth Rs 1.5 lakh crore were exported from India in the fiscal year 2025.

Tata Electronics and Taiwanese contract manufacturer Foxconn assemble iPhones in India.

Tata, a relatively new Apple supplier, recently started production in a new plant. The plant in Tamil Nadu's Hosur started operations in April to make older iPhone models on one assembly line, according to a Reuters report.

Another plant run by Foxconn will come up in Bengaluru. "The unit in Karnataka will soon become the second-largest Foxconn plant after China's unit. It will create 40,000 direct jobs, especially for middle-level educated individuals," said Foxconn CEO Young Liu.

Foxconn has also started manufacturing Apple AirPods in Telangana for exports.

'India Will Not Lose Much'

It will be Apple which will lose more than India if the iPhone assembly units are moved to the US, according to experts. "For every iPhone sold at around $1,000 in the US, India's share is less than $30. Yet, in trade data, the full $7 billion export value adds to the US trade deficit," according to a report by a think tank.

From Taiwan to Japan, every built-in-India iPhone has the imprint of a dozen countries through its software, design and brand. A $1,000 iPhone carries a value of about $450 for the device, US component makers like Qualcomm and Broadcom get another $80. Taiwan gets $150 for chip manufacturing, South Korea adds $90 for OLED screens and memory chips, and Japan contributes $85 for cameras. Countries like Germany, Vietnam and Malaysia account for another $45 for smaller parts, the report by Global Trade Research Initiative (GTRI) said.

"If Apple's assembly moves out, India will be forced to stop propping up shallow assembly lines and instead invest in deeper manufacturing - chips, displays, batteries, and beyond," said GTRI founder Ajay Srivastava.

Even though shifting assembly units will create entry-level jobs in the US, the production cost would rise multi-fold for Apple. In India, Apple pays an average of $290 per month to assembly workers. Under US minimum wage laws, it will rise to more than $1,000 (The federal minimum wage in the US is $7.25 per hour).

Deepak Shenoy, CEO of Capitalmind AMC, said that India should take a leaf from Trump's book and also push toward local manufacturing. "This is exactly what India needs to be telling its own manufacturers, too - build here, not in China. Every country's leaders want jobs for their own people," he posted on X.

Why are we all antsy about Trump telling Tim Cook to not build in India but to build in the US? This is exactly what India needs to be telling its own manufacturers too - build here, not in China.

Every country's leaders wants jobs for their own people.

— Deepak Shenoy (@deepakshenoy) May 15, 2025

Some industry experts have also warned that if the US indeed starts manufacturing iPhones, it would cost $ 3,000 - three times the current cost of around $1,000. The higher labour costs would be the biggest factor in the price surge.

Sources within Apple, meanwhile, say the company has no plans to change its India investment roadmap based on what Trump said.

Currently, Apple is among the most prominent firms caught in US-China trade tensions, despite a reprieve for high-end tech goods such as smartphones and computers. Even though completed smartphones are exempted from tariffs, not all components that go into Apple devices are spared.

On Monday, the US and China announced an agreement to suspend tit-for-tat tariffs for 90 days, de-escalating a trade war that spooked markets.

Prior to the agreement, Mr Cook said Apple was "not able to precisely estimate the impact of tariffs".

'Jobs Aren't Coming Back': Steve Jobs

Trump is not the first American President who pushed for bringing manufacturing jobs to America's heartland.

In 2011, Barack Obama, during a private dinner with former CEO of Apple Steve Jobs, asked, "What would it take to make iPhones in the United States?"

"Those jobs aren't coming back," Jobs responded.

More than a decade after Jobs' declaration, experts believe the US still lacks the required supply chain and necessary skills to build electronics.

Molson Hart, the founder of Viahart - an educational toy company - lists 14 reasons why it's difficult to build in America in a detailed blog post.

"When it comes to the iPhone, all the factories which make the needed components are in Asia," he writes. "Supply chains sound complicated, but aren't. If you can't get the components you need at a reasonable price and timeline to build a finished product, it doesn't matter what the tariffs are, you have to import it, because you can't build them locally."