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CNBC
17 hours ago
- Business
- CNBC
How Tim Cook convinced Trump to drop made-in-USA iPhone — for now
President Donald Trump has made clear that he wants Apple to make iPhones in the U.S. Apple CEO Tim Cook is doing what he can to appease the commander in chief, without making that ultimate concession. Cook on Wednesday appeared at the White House with President Trump to announce plans to spend about $600 billion over four years in the U.S. Apple didn't announce the made-in-USA iPhone that Trump wants, but Cook got to tout Apple's position on U.S. production. Some of Apple's most valuable parts, such as its glass and facial recognition sensor, are made by U.S. companies that Apple has worked with for years. Final assembly is only a small, though very critical, part of iPhone production. "The final assembly that you focus on, that will be elsewhere for a while," Cook said Wednesday in the Oval Office. Trump appeared happy enough, for now. "He makes many of the components here, and we've been talking about it," Trump said. "The whole thing is set up in other places, and it's been there for a long time in terms of cost and all, but I think we may incentivize him enough that one day he'll be bringing that back." Experts said Cook's announcement seemed designed to get Apple out of Trump's crosshairs with respect to tariffs. Trump announced during the public meeting that the administration planned to place a tariff on chips that would double their price, but Apple — which relies on hundreds of different chips for its devices — would be exempt. "CEOs are realizing that they do have to do something, and what they've discovered is that if they give the president something to brag about without destroying their company, that the problem might go away for a certain amount of time," said Peter Cohan, professor of strategy and entrepreneurship at Babson College who has written case studies on Apple. The gambit worked. Apple stock rose 5% on Wednesday and another 3% on Thursday. "What Tim Cook demonstrated in the first administration was a real savvy navigation of the treacherous waters," said Nancy Tengler, CEO of Laffer Tengler Investments, which holds a position in Apple. "I thought this announcement was super-important symbolically, because the president is looking for headlines." The centerpiece of Apple's announcement was the so-called American Manufacturing Program, which Apple said was designed to incentivize other companies to make parts for computers in the U.S. By Apple committing to purchase parts and expand its relationship with U.S. suppliers, it could give those companies the skills and capacity to expand their business. And it lets Apple take some credit for supporting the 450,000 total jobs at its suppliers. A closer look at the members of the program shows that Apple is leaning on some of its longest-tenured partners. All together, Apple said that its U.S. suppliers are on track to make 19 billion chips for its products this year. That level of business doesn't appear overnight. For example, Apple said that all of its cover glass for iPhones and Apple Watches would be made by Corning, in Kentucky, and that it would spend $2.5 billion on that effort. It's a powerful symbol — while the phone might be screwed together in China or India, the surface that users touch around the world will be made in the U.S. But Apple has pointed to Corning as a critical American supplier in the past. The company's glass has been used on the iPhone since its first version in 2007. While Apple typically doesn't let its suppliers talk about their relationships, former COO Jeff Williams hailed Corning's glass in 2017, when it got an "investment" from the Apple Advanced Manufacturing Fund. Apple followed that up with a $250 million commitment in 2019, and $45 million in 2021. Analysts are skeptical that the partnership could substantially improve Corning's revenue. Morgan Stanley analysts wrote on Thursday that Corning "already produces 100% of the cover glass for Apple's phones and tablets," adding that Corning's glass business called Specialty Materials is worth about $2 billion per year. Apple also highlighted its partnership with Coherent, a longtime supplier of lasers for Apple's facial recognition hardware, which is made in Texas. Morgan Stanley pegged the business at about $100 million per year, and said Apple has options including Lumentum and Sony. The iPhone maker said it expanded a partnership with Texas Instruments to make chips in Texas and Utah. Texas Instruments has long supplied chips for the iPhone, such as circuits to control USB interfaces or power displays. Apple said it would partner with Samsung, another key supplier of parts like iPhone displays, to launch an "innovative new technology for making chips," without offering additional details. Apple declared that it will partner directly with companies in the semiconductor chain, even if they typically sell services or goods to Apple suppliers. Other partnerships are with Applied Materials, a tooling company, GlobalFoundries, a chip foundry, and GlobalWafers America, which is suppling Taiwan Semiconductor Manufacturing Company and Texas Instruments with made-in-USA wafers, the starting point for a batch of chips. GlobalFoundries manufactures chips for Broadcom, which supplies wireless chips for iPhones. Both will work with Apple to develop and manufacture 5G components in the U.S. Meanwhile, Apple will buy millions of advanced chips made by TSMC in Arizona, where it will be the factory's largest customer. Cook joined former President Biden at the plant in 2022 and committed to buying chips from the factory. Apple said it would invest in and become a customer at an Arizona Amkor facility, which packages and tests chips, the final stage before installation in a computer. Apple also said it would expand existing data centers for artificial intelligence in North Carolina, Iowa, Nevada and Oregon. It's highlighted these data centers in the past in spending commitments. While Apple's announcement sent partner stocks up, JPMorgan Chase analysts warned in a note on Thursday that "the new and expanded engagements might not be completely incremental to global revenues and outlook." Trump had a different take. "Oh, I love that you're doing this," the president said, after reading a list of Apple's commitments. Apple has little to worry about when it comes to who will hold the company accountable for its promises. The company doesn't break out U.S. spending, and most of Apple's suppliers are contractually required to keep the information secret. Apple doesn't report how much its new campuses in Austin or North Carolina end up costing. Additionally, the $600 billion headline number likely includes lots of regular expenses. Apple said in February that its $500 billion commitment included payments to U.S. suppliers, direct employment, data centers for Apple Intelligence and corporate facilities, as well as spending on Apple TV+ productions in 20 states. Apple started publicly announcing U.S. spending during Trump's first administration in 2018, at a rate of about $70 billion per year. In February, the company committed to $125 billion per year. Wednesday's announcement brings that figure to $150 billion annually. That's still a fraction of Apple's total spending. In Apple's fiscal 2024, Apple spent $210 billion globally on cost of goods sold, $57.5 billion on operating expenses, and $9.45 billion in capital expenditures for nearly $275 billion in global spending during the period. Teffler said she didn't think the newly announced spending would be material to Apple's profitability, especially since it already has relationships with the various companies such as Corning. "They're going to spend money somewhere," Tegler said. Wedbush analyst Dan Ives, who previously predicted a made-in-USA iPhone would cost billions to produce and would leave consumers paying $3,500, said the Wednesday announcements indicate a much different approach. He said it's "the cost of doing business."
Yahoo
18 hours ago
- Business
- Yahoo
Apple's Commitment To U.S. Manufacturing Might Have Saved Us From Massive iPhone 17 Price Hikes
We've been worried about the price of the iPhone 17 spiking ever since Trump initiated his new wave of tariffs in April. Since then, we saw Apple say that tariffs would cost it up to $900 million in the June quarter, and up to $1.1 billion in the September quarter. The iPhone was not impacted by tariffs, but Trump threatened Apple with 25% tariffs on iPhone imports. Some reports indicated Apple wanted to increase the prices of the iPhone 17 regardless of tariffs, but the company was worried about the optics. Other analysts said the 2025 iPhones might cost $50 more than their predecessors. Back-of-the-envelope math using AI indicated Apple could absorb the tariff losses associated with other products by increasing the iPhone 17 prices globally by $50. The first week of August brought two big developments along with it. First, Trump announced a 100% tariff on semiconductors, or the chips that power devices like the upcoming iPhone 17 series. Exemptions would be awarded to companies that move some of their production to the U.S. Separately, Apple announced the new American Manufacturing Program (AMP), part of its $600 billion investment in the U.S. economy. That figure includes a brand new $100 billion commitment. Apple's massive investments proposed for the next four years, combined with the announcement that several key iPhone components will be produced in the U.S., are enough for Apple to avoid the 100% tariffs on semiconductors that would have surely impacted the iPhone 17 price. Also, considering that the AMP program will ensure that key iPhone parts will be made in the U.S., it's unlikely for Trump to impose additional tariffs on the iPhone. All that suggests the iPhone 17 price hikes will be minimal to non-existent. Read more: How To Control An iPad With Your iPhone How Much Will The iPhone 17 Cost? While the iPhone 17 series seems to have avoided an iPhone-related tariff, I still expect minimal price hikes for this year's new iPhones. Those estimates that said Apple might increase the prices of some iPhone 17 models by up to $50 make sense in light of these developments. Apple can even opt for specific price hikes that don't impact the entire iPhone 17 series. The base iPhone 17 might still start at $799, but Apple might raise the price of the iPhone 17 Air above that of the iPhone 16 Plus, which it will be replacing. The phone might cost $949 to $999 instead of the expected $899 starting price. The iPhone 17 Pro prices might also get $50 price hikes. Another option is for Apple to eliminate the 128GB storage tier from the base model. Thus, the 256GB model will be the cheapest iPhone 17 Pro, priced at $1,099. But that's what the current 256GB iPhone 16 Pro costs. The iPhone 17 Pro Max would start at $1,299 in this scenario, like its predecessor. Apple eliminated the 128GB storage tier for the Pro Max models in 2023. A Win For Trump This week's events indicate that Apple will do anything necessary to avoid a more significant tariff burden that would force it to pass costs to consumers. Significant price hikes across its lineup of products might impact revenue and profits. The new $100 billion commitment to the U.S. economy and the new AMP initiative are better alternatives to tariffs. President Trump will also declare victory. The iPhone can't be made in America, but if several key components are made in the States, it's a win for his administration that seemingly proves tariffs work. After all, Apple is committed to producing key iPhone components in the U.S. that are related to Trump's national security policy. The list includes chips, chip-related technologies, and rare earth magnets. That said, U.S. manufacturing of iPhone parts and other Apple components might increase Apple's bill-of-material costs for these devices in the coming years. Apple has skirted the tariffs for now, but it might have to increase prices anyway to deal with costs related to American manufacturing. The iPhone 17 series, with its potential price hike, might be just the start. Read the original article on BGR. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Int'l Business Times
19 hours ago
- Business
- Int'l Business Times
Apple Commits $100 Billion To Expand US Manufacturing Amid Trade Policy Shifts
Apple Inc. has announced plans to invest an additional $100 billion in U.S. manufacturing over the next four years, increasing its total domestic investment to $600 billion. This initiative is part of Apple's broader "American Manufacturing Program," aiming to boost production of essential components such as chips and cover glass for iPhones and Apple Watches within the United States. The company is collaborating with Corning Inc. to manufacture 100% of the cover glass for its devices at Corning's facility in Harrodsburg, Kentucky, a $2.5 billion project marking the first time all Apple device cover glass will be produced domestically. Additionally, Apple has partnered with Samsung Electronics to use its semiconductor plant in Austin, Texas, to produce chips for upcoming devices. This announcement coincides with the Trump administration's imposition of a 100% tariff on chip imports. However, companies investing heavily in U.S. manufacturing, such as Apple, have been granted exemptions from these tariffs, encouraging reshoring of production. According to a Reuters report, Apple's increased domestic investment aims to strengthen the U.S. manufacturing base amid shifting trade dynamics. The company detailed its expanded manufacturing plans on its official newsroom website, outlining the collaboration with Corning to produce all iPhone and Apple Watch cover glass in Kentucky ( Analysts caution, however, that while this investment is significant, it does not signal a full reshoring of iPhone assembly to the U.S., which remains logistically and economically challenging, as noted in a Business Insider analysis. Market reactions were positive, with Apple's stock rising 5.1% after the announcement, according to MarketWatch, reflecting investor optimism about the company's commitment to U.S. manufacturing.
Time of India
a day ago
- Business
- Time of India
Viral: Apple CEO Tim Cook gifts a 24K gold and glass statue to Donald Trump, netizens react
Image credits: X/@yipfella There are over 2.2 billion active Apple devices worldwide. From phones to tablets, the company dominates various categories across the globe. One of the largest markets in the world for Apple has been the US, where in 2023, there were over 150 million active iPhones. With an ever-increasing market, the company's production base has been in China since the 2000s. Over the recent years, Apple has shifted some of its production to Vietnam, Thailand and India. Amidst all these initiatives, the company has not invested in building a major product in the United States. However, just as it is with many things under the Trump administration, things are about to change. Apple has recently announced that it will heavily invest in the American Manufacturing Program (AMP), which aims to bring advanced manufacturing to the United States. As a symbol of its investment in the US, the CEO of the company, Tim Cook, presented the POTUS Donald Trump with a custom-made gift. The unique unit of one consists of a circular glass made by Corning and a 24K gold base made in Utah, designed and built in the US. The mentions on the glass include "President Donald Trump" with an Apple logo, Tim Cook's signature and "Made in USA" with the year 2025. According to Cook's statement, Apple will be investing $600 billion over four years and launching a new American Manufacturing Program. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Stylish New Mobility Scooters Available for Seniors (Prices May Surprise You) Mobility Scooter | Search Ads Search Now Undo Netizens react to Tim Cook's gift to Donald Trump Image credits: X The video of the gesture is going viral all over social media, with people comparing it to various moments and traditions in history. "These are like the gifts that Politburo members used to give to Brezhnev," wrote one, referencing the gesture. "Holy smokes that is 24k gold. For all you non-science folks out there. That means it's pure gold. 99.9% at least. That thing is literally worth more than all ya'll house. Siiiick!" commented another. "This feels like something you do for Kim Jong Un to avoid having your family fed to pigs. I guess that's where we are now," quipped one. "Mongols with tributes of horses for China's Emperor (the dynasty collapses soon)," pointed one out. "I've seen a server do what Tim Cook just did at a Michelin-star restaurant. They describe the dish and origin of the ingredients, then build it in front of you," shared one humorously.
Tom's Guide
a day ago
- Business
- Tom's Guide
iPhone 18 could be made with even tougher glass — built in the USA
Apple has released details for its $600 billion American Manufacturing Program, which outlines new and strengthened partnerships with U.S. component makers. Part of this commitment, as spotted by 9to5 Mac, will see $2.5 billion being used to expand the company's partnership with Corning, the company behind the Ceramic Shield glass used on recent iPhones and the Gorilla Glass screens seen on many of the best Android phones. According to a separate Apple announcement, 100% of the cover glass for both the iPhone and the Apple Watch will be produced in Corning's Harrodsburg, Kentucky, manufacturing facility. However, the press release doesn't mention when this change will take place beyond Apple's release, which states that 'soon, every iPhone and Apple Watch sold around the world will be built with Kentucky-made cover glass.' As spotted by Android Authority, Apple is also working with Samsung to launch an 'innovative new technology for making chips, which has never been used before anywhere in the world.' This will take place at Samsung's fabrication plant in Austin, Texas, and will supply chips that will apparently optimize both the power and performance of Apple products. Outside of this statement, there is no real information on what this change will mean or what impact Samsung will have when it comes to the next generation of A-series chipsets. This wouldn't be the first time that Samsung has manufactured the chips, with the company having a hand in the A4 chip seen in the iPhone 4 and the iPhone 6s' A9 chip. However, Apple soon moved chip production to the Taiwanese company TSMC as its main chip producer, and this looks to be continuing for the iPhone 17 series. According to rumors, the A19 and the A19 Pro chip could feature TSMC's 2nm process. This could bring a noticeable jump in performance for the phone, especially when combined with the rumored 12GB of RAM. Apple has also entered an agreement with GlobalFoundries to bring more semiconductor manufacturing to the United States, with the focus being the GlobalFoundries semiconductor facility in Malta, New York. This follows Trump threatening a 100% tariff on semiconductor imports to the U.S. (via the New York Times), although it should be noted that TSMC has been excluded from this. It isn't just production, as Apple will be the first, and largest, customer for Amkor's new advanced chip packaging and test facility in Arizona. Considering the recent tensions between Apple and the Trump administration regarding possible price increases on suppliers, the push to develop jobs and parts in the U.S. could stand as a peace treaty of sorts between the two parties. At this point, we can't say for certain what this will mean for future Apple products, although hopefully it will help to mitigate the predicted price rises that were expected due to the tariffs. Get instant access to breaking news, the hottest reviews, great deals and helpful tips. Follow Tom's Guide on Google News to get our up-to-date news, how-tos, and reviews in your feeds. Make sure to click the Follow button.
