Apple Inc. (NASDAQ:AAPL) could see production costs spike sharply if it shifts iPhone assembly to the United States, according to a research note by Bank of America published Wednesday.
Key Cost Implications
-
Assembling the iPhone 16 Pro Max in the U.S. could raise costs by 25%, driven primarily by domestic labor expenses.
-
If Apple is subject to reciprocal tariffs on imported components and sub-assemblies, total production costs could rise by more than 90%, BofA’s Wamsi Mohan noted.
Logistical and Policy Challenges
-
Apple’s current supply chain is globally integrated, making a full production shift to the U.S. logistically complex.
-
Without tariff waivers on critical sub-assemblies, the cost of transitioning to U.S.-based manufacturing remains prohibitive.
Risk Mitigation Strategies Highlighted
BofA outlined several potential approaches Apple could take to reduce exposure:
-
Expand production in India to diversify supply chain risk.
-
Adjust pricing of products and services.
-
Negotiate better supplier terms to offset cost increases.
-
Introduce premium products at higher price points.
-
Extend the iPhone launch cycle to once every two years to ease manufacturing transitions.
“A two-year release schedule may put less pressure on the supply chain to adapt to version changes,” said Mohan.
No Immediate Shift Expected
Despite rising geopolitical trade tensions and discussions on reshoring production, BofA does not expect Apple to make any near-term changes to its manufacturing strategy. Instead, the company is likely to continue diversifying its production base, particularly in India.
Financial Health Context
To better understand Apple’s profitability trends and operating leverage, refer to:
-
Key Metrics (TTM) API — provides real-time insights into Apple’s margins, returns, and capital efficiency
