Wedbush: Trump's pressure didn't work, and it was difficult for Apple (AAPL.US) iPhone production to leave China and India

The Zhitong Finance App learned that, despite President Trump's pressure to stop building factories in India, Apple (AAPL.US) and its manufacturing partners may keep iPhone production centers in India and China.

The bank's analysts wrote in a report to customers: “Over the past few weeks, all of our work across the Asian supply chain has made us highly convinced that considering the uncertain tariff environment Apple is facing in China, it is a very wise strategic move for Apple to actively promote production in India. Although Apple has announced an investment of 500 billion US dollars (and probably more) in the US, mostly in AI-driven projects, given the reversed cost model and Hercules-like supply chain logistics required for such projects, we don't think it's possible to manufacture iPhones in the US in the short term.”

Prior to the agency's analysis, President Trump said this week, “I have a slight problem with Apple CEO Tim Cook.” Trump told reporters during his visit to the Middle East: “He is building houses all over India. I don't want to build a factory in India.” Trump said that as a result of this conversation, Apple will “increase production in the US,” but did not disclose specific details. Apple said in February this year that it will invest 500 billion US dollars in the US over the next four years.

Although analysts at Wedbush said they expect the Trump administration to exert more pressure to manufacture iPhones in the US (White House press secretary Caroline Levitt said in April this year that President Trump thinks iPhones can be manufactured in the US), this is “impossible” for the tech giant headquartered in Cupertino, California.

The analyst added, “People who are optimistic about Apple need to look ahead to the next 3 months and assume that the Trump administration will reach an agreement with India next, which will further improve Apple's iPhone production in the fall.”