Published: Wed, June 12, 2019
Finance | By Loren Pratt

Apple can reportedly make enough iPhones outside China

Apple can reportedly make enough iPhones outside China

The company's statement came after the trade war between the USA and China showed signs of deepening, and media reports that Apple could pull iPhone production out of china if the trade war continues to escalate.

The trade war between the United States and China is far from the end. Assuming that Apple wouldn't pass on the added cost to consumers - which is a fair assumption - J.P. Morgan anticipates that Apple's gross margins would fall by 4% and that the company, as a result, would see a discernible drop in earnings. The firm moved much of its production to China in previous years and has embraced the company as another of its largest sources of revenue due to its nature as a status symbol.

Apple's production in China has become a major concern for investors as the Trump administration escalates threats to hit Beijing with new tariffs on about $300bn worth of Chinese goods.

Apple has already suffered a major dip in iPhone sales in recent years, this new tariff could lead to the extra cost passing on to the U.S. consumer, further pushing them to Apple's competitors notably Samsung.

Hon Hai, better known as Foxconn, is a key manufacturing partner to Apple.

The Hon Hai official also revealed that the company is now investing in its Indian production facilities, suggesting that if needed, more of the iPhone output could come from this country if things get more complicated in China for Apple. He further said that Foxconn has enough "capacity to meet Apple's demand".

Apple is reportedly prepared if the US-China trade war forces it to move production outside China.

Worth noting that Foxconn also has a factory in Chennai, India, but now it only runs some tests and isn't manufacturing actual Apple devices.

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