Potential High-End iPhone Prices at 3 Lakh Rupees Due to US Production, Apparently Not in India
Progressive Take:
US iPhones Turning Tad Expensive
The buzz in tech circles has been massive after President Donald Trump's latest conversation with Apple CEO Tim Cook. Trump reportedly asked Cook to limit Apple's expansion in India, causing quite a stir among industry experts.
Prashant Girbane, head honcho of the Mahratta Chamber of Commerce, Industries, and Agriculture, doesn't mince words. "If US starts manufacturing iPhones stateside instead of India, you're looking at a whopping $3,000 product—triple the current cost of $1,000 per iPhone," he pointed out.
Currently, around 80% of Apple's manufacturing happens in China, generating roughly 5 million jobs. Cook announced plans to set up shop in India to diversify the supply chain and secure their operations from the dominance of one country, possibly alluding to China.
Girbane adds, "The relocation of manufacturing isn't a march of jobs from US to India; it's a move from China to India to create a robust supply chain that provides protection for American companies and consumers."
While the comment has left people seething, Girbane believes the heat will simmer down eventually.
NK Goyal, Telecom Equipment Manufacturers Association chairman, however, advises against jumping the gun. "We've learned the hard way that we need to watch our words before the US President. In the past year, India has churned out iPhones worth over $22 billion, with three manufacturing facilities and more on the way," he said.
Goyal also mentioned that a significant portion of Apple's manufacturing has already been shifted from China to India. "Apple may decide to produce in the US, but I reckon they'll stick with India. Furthermore, international tariffs are on the rise and changing frequently, making it unwise for Apple to abandon India," he asserted.
Jaideep Ghosh, former partner at KPMG, revealed that iPhones worth approximately 1.75 trillion rupees were manufactured in India last fiscal year, compared to 1.2 trillion rupees the year prior. "The Apple ecosystem is crucial for India," he said, adding a cautious warning. "If Apple were to withdraw from India in the long term, the impact on our markets, especially employment, would be unfavorable."
Ghosh also highlighted the dilemma Apple faces if it moves production to the US or other Western nations. Higher labor costs in the US could lead to surging production expenses, potentially forcing Apple to slash profit margins. This shift, despite the strategic appeal, could turn out to be a challenging financial decision.
(Except for the headline, this story has not been edited by our team and is published from a syndicated feed.)
Sources and Insights:
- If iPhone manufacturing were to shift from India to the United States, the potential impact on prices would be significant. Industry analysts suggest that the cost of an iPhone could triple, from the current price of around $1,000 to approximately $3,000 per unit[1][2]. This increase is primarily due to higher labor costs in the U.S. compared to India or other countries like China and Vietnam, where manufacturing is currently more prevalent[1][2].
- The potential price increase poses a significant challenge for Apple in maintaining competitiveness in the global market. To remain competitive, Apple may need to reduce its profit margins[3]. This could prove financially challenging despite the strategic appeal of relocating closer to Western markets.
- The potential relocation of Apple's manufacturing from India to the United States, as suggested by Prashant Girbane, could lead to a significant increase in iPhone prices, potentially tripling from the current $1,000 to $3,000 per unit, due to higher labor costs in the US compared to countries like India or China.
- The proposed shift in iPhone manufacturing from countries like India or China to the United States could pose a significant financial challenge for Apple, as higher labor costs in the US could lead to surging production expenses, potentially forcing Apple to slash profit margins in order to maintain competitiveness in the global market.
