Dan Ives, global head of technology research at Wedbush Securities, believes it’s unrealistic for Apple to move iPhone production onshore, despite the White House agenda to bring manufacturing home.
In a new CNBC interview, the investor points out that Apple has made a smart move by creating a manufacturing base in India to diversify its supply chain and reduce reliance on China.
But with President Trump threatening to slap 25% tariffs on iPhones manufactured outside the US, Ives says Apple investors are now in a tough spot because he doesn’t think it’s feasible for the tech giant to uproot its global supply chain.
“It’s a Pinocchio story – the reality of actually having iPhone production in the US. Because in my opinion, that will take four to five years, $20 to $30 billion, even to move 15% to 20% of the supply chain. And then if you actually produce the iPhone in the US, you’d be looking at $3,500 iPhones.
So I view it as Apple’s situation, they tried to pivot around India and that was a smart strategy and now their backs are against the wall. It was a Twilight Zone day today for any Apple investor, given Apple has done all the right things in terms of pivoting out of China and now [they’re] saying come to the US – that’s a fairy tale.”
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