Apple Faces $20-$30 Billion Cost to Move 15-20% of iPhone Production to US

Dan Ives, the global head of technology research at Wedbush Securities, has expressed skepticism about the feasibility of Apple moving its iPhone manufacturing to the United States. He believes that such a shift is unrealistic given the current global supply chain dynamics and the economic realities involved.

In a recent interview, Ives highlighted that Apple has strategically diversified its supply chain by establishing a manufacturing base in India. This move aims to reduce the company's reliance on China, which has been a significant manufacturing hub for Apple. However, the investor points out that the White House's agenda to bring manufacturing back to the U.S. poses a significant challenge for Apple investors. President Trump's threat to impose 25% tariffs on iPhones manufactured outside the U.S. adds to the complexity of the situation.

Ives argues that uprooting Apple's global supply chain to move production to the U.S. is not feasible. He estimates that it would take four to five years and an investment of $20 to $30 billion to relocate even 15% to 20% of the supply chain. Moreover, producing iPhones in the U.S. would significantly increase the cost, potentially making iPhones priced at around $3,500. Ives views this scenario as a "Pinocchio story," suggesting that it is more of a fairy tale than a realistic possibility.

Ives' analysis underscores the challenges Apple faces in navigating the current political and economic landscape. The company has already taken steps to pivot away from China by establishing manufacturing in India, which Ives considers a smart strategy. However, the recent political pressures to bring manufacturing back to the U.S. present a new set of challenges. Ives describes the situation as a "Twilight Zone day" for Apple investors, highlighting the uncertainty and complexity of the current environment.

The investor's comments reflect the broader debate about the future of global manufacturing. While there is political pressure to bring manufacturing back to the U.S., the economic realities and supply chain considerations often dictate the final decision. For Apple, the benefits of maintaining its manufacturing operations in China, including lower labor costs and a well-developed supply chain, outweigh the potential advantages of moving to the U.S. Any shift in manufacturing would likely come with significant challenges and costs, making it an impractical option for the tech giant.