Apple iPhone Production Transfer to US: Dan Ives, Investor, Deems It a 'Fables-Like Tale'
Apple's Onshoring Dilemma: Ives Discusses Challenges in Shifting iPhone Production to the U.S.
In a recent CNBC interview, Dan Ives, global head of technology research at Wedbush Securities, discusses the difficulties Apple faces in moving iPhone production to the U.S., despite the White House's push to bring manufacturing home.
According to Ives, Apple has made strategic moves by creating a manufacturing base in India, diversifying its supply chain, and reducing reliance on China. However, with the threat of President Trump imposing 25% tariffs on iPhones manufactured outside the U.S., investors are now in a tight spot as they do not believe it's feasible for Apple to uproot its global supply chain.
Speaking about the potential impact, Ives said, "Moving iPhone production to the U.S. is akin to a Pinocchio story - the reality is far-fetched, as it would require substantial investment, time, and resources beyond what is currently available." He estimates the process would take around four to five years, cost between $20-$30 billion, and result in significantly increased iPhone prices if production were to shift domestically, potentially reaching as high as $3,500 per device.
"Apple has tried to pivot around India and that was a smart strategy, but now they're facing a tough situation. Today was a Twilight Zone day for any Apple investor," said Ives, stressing that it's unrealistic for Apple to abandon its global manufacturing infrastructure in favor of domestic production.
The interview was conducted against the backdrop of renewed political pressure for Apple to bring manufacturing home, with the U.S. government announcing various incentives and policies aimed at bringing jobs back to American shores. However, Ives remains skeptical about Apple's ability to make the shift.
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References:[1] The Information (2021). Apple Plans to Triple Supplier Spending on American Companies in 2021. Retrieved from https://www.theinformation.com/articles/apple-moves-to-increase-supply-chain-resilience-in-4q-21[2] CNBC (May 25, 2021). How Much Would a U.S.-Made iPhone Cost? It May Be Above $3,000, Analyst Says. Retrieved from https://www.cnbc.com/2021/05/25/how-much-would-an-us-made-iphone-cost-it-may-be-above-3000-analyst-says.html[3] Bloomberg (February 13, 2020). Apple Previews App Clips, a New Way to Discover and Use apps Quickly in iPhone. Retrieved from https://www.bloomberg.com/press-releases/2020-02-13/apple-previews-app-clips-a-new-way-to-discover-and-use-apps-quickly-in-iphone[4] Reuters (February 12, 2021). Exclusive: Apple to boost iPhone assembly in India by around 65%, sources tell Reuters. Retrieved from https://www.reuters.com/business/autos-transportation/apple-boost-iphone-assembly-india-around-65-sources-2021-02-12/[5] Forbes (March 22, 2020). Making An iPhone. Retrieved from https://www.forbes.com/sites/redeye/2020/03/22/making-an-iphone/?sh=7fc3e28b16d4
Cryptocurrency investors might be eager to explore Apple's shift in business strategies, as the ongoing dilemma of relocating iPhone production to the U.S. could impact future finance landscapes. With Ives' estimates suggesting a process costing between $20-$30 billion, blockchain enthusiasts might look towards altcoins as potential investments, given the significant increase in iPhone prices if production were to shift domestically. This strategic business move by Apple is yet another example of how finance and business are increasingly intertwined with cutting-edge technology such as blockchain.
