Apple faces a potential increase of $900 million in costs this quarter due to tariffs, prompting CEO Tim Cook to announce a significant shift in iPhone production from China to India. The strategic move highlights the impact of US tariffs, particularly the 145% tariffs imposed by the Trump administration, on Apple's global supply chain. Despite these challenges, Apple reported a 5% revenue increase in the January to March quarter, driven by a 2% rise in iPhone sales, although sales in the Greater China region slightly declined. The production shift is part of Apple's broader strategy to diversify its manufacturing locations, with Vietnam set to produce most iPads, Macs, Apple Watches, and AirPods for the US market. Meanwhile, the Trump administration's push for iPhone production in the US remains unlikely due to the potential for significantly increased costs, as highlighted by analysts who estimate iPhone prices could triple if manufactured domestically.

Apple CEO Tim Cook announced that tariffs could add $900 million to the company's costs this quarter, leading to a decision to shift iPhone production for the US market from China to India. This decision reflects the impact of the Trump administration's 145% tariffs on China's goods.

Approximately 90% of Apple's iPhone production has historically been based in China, but the company is now diversifying its supply chain to reduce risks associated with centralized manufacturing. This shift aims to mitigate the effects of tariffs and potential geopolitical tensions.

Despite the challenges posed by tariffs, Apple's financial performance in the January to March quarter was strong, with a 5% increase in revenue, reaching $95.4 billion, and a 2% growth in iPhone sales. However, sales in the Greater China region faced a slight decline due to growing competition.

Apple's diversification strategy includes relocating production of nearly all iPads, Macs, Apple Watches, and AirPods sold in the US to Vietnam, underscoring its efforts to reduce dependence on Chinese manufacturing amid tariff pressures.

The Trump administration's ambition to bring iPhone production to the US is deemed nearly impossible by analysts, who warn that the cost of an iPhone could skyrocket to around $3,500 if manufactured domestically.

Apple's $500 billion investment plan, announced in February, is focused on expanding production capacity outside of China, including building server facilities and an academy to train in manufacturing techniques, rather than shifting iPhone production to the US.

Apple's stock experienced a nearly 4% drop in after-hours trading following the earnings call, reflecting investor concerns over the uncertainty surrounding tariffs and the stability of the company's global supply chain.