Latest news with #Cupertino-headquartered
Time of India
3 hours ago
- Business
- Time of India
US tariffs: Smartphones, PCs may become expensive for customers, says S&P
New Delhi: Smartphones and personal computers (PCs) may become expensive as a result of manufacturers passing on the higher costs, arising from US tariffs , to end-consumers, S&P Global Ratings said. 'We expect PC and phone makers will pass on the higher cost to customers even if it leads to some demand destruction, especially for consumers who make up 45 per cent of PC sales and most of smartphone sales,' the global credit ratings agency said in a research note, seen by ETTelecom . It noted that smartphone makers, such as Apple and its key suppliers, and personal computer (PC) manufacturers heavily reliant on China, are the most vulnerable to the US tariffs. 'S&P Global Ratings believes the most vulnerable companies are those with the largest reliance on China's integrated technology production infrastructure and the U.S. as a major end market,' it said in the research note. In particular, it said Apple and its key suppliers, including Hon Hai Precision Industry (Foxconn), may be the most disrupted due to reliance on China for production. Apple, with a shipment share of over 60 per cent in the US market as of Q4 2024, faces a risk given its significant reliance on production in China. iPhones account for nearly 50 per cent of Apple's revenue, with the US representing approximately a third of its global smartphone shipments, said S&P. The Cupertino-headquartered firm, however, has been shifting its production supply chain to India, which is expected to cover most of Apple's iPhone shipments to the US by 2026, the credit rating agency estimated. In turn, Korean Samsung's bulk of production happens in Vietnam and India. 'Vietnam and India account for the bulk of Samsung's production base. Smartphone production is labor intensive, favoring production in countries with low labor costs such as India and Vietnam. Tariffs on these countries pose further risk for the issuers with significant U.S. smartphone exposure such as Apple and Samsung and their suppliers,' said S&P in its research note. Xiaomi is the only outlier that does not have direct exposure to the US consumer market. Its chips, too, are fabricated in Taiwan, and are unlikely to be a target of the US export restrictions, and neither will be subject to China's tariff on US goods. The Donald Trump administration has imposed a 10 per cent baseline tariff on all countries, including India, with China also imposing reciprocal tariffs on the US. Notably, consumer electronics items, including smartphones and laptops, remain exempt from tariffs. However, Trump has threatened to impose a 25 per cent tariff on all smartphone brands, particularly targeting Apple iPhones and Samsung handsets made outside the US, unless they are manufactured in America, the US media reported recently. Apple's vendors nearly doubled exports of iPhones from India in March–a majority to the US–to ₹20,000 crore, from ₹11,000 crore a year ago, ET reported in its April 7, 2025, edition. Recently, the International Data Corporation (IDC) projected that global smartphone shipments may grow by just 0.6 per cent year-on-year to 1.24 billion units in 2025, down from the 2.3 per cent year-on-year shipment growth it forecasted in February. 'Since April 2nd, the smartphone industry has faced a whirlwind of uncertainty. While current exemptions on smartphones have offered temporary relief, the looming possibility of broader tariffs presents a serious risk,' Nabila Popal, senior research director with IDC, said in a report separately. Popal added that despite complexities driven by geopolitical uncertainties and trade risks, India and Vietnam are expected to remain the key alternatives to China for smartphone production. 'However, additional tariffs of 20-30 per cent on US-bound smartphones could post a serious downside risk to the current U.S. market outlook,' she had said. Laptop, PC makers also at risk Beyond smartphones, PC makers Dell, HP and Lenovo are also exposed to tariff risk. S&P said this is due to high input costs, from which tariffs are calculated, and high reliance on China for manufacturing laptops. Desktops, by contrast, are assembled across Asia and Mexico. The credit rating agency estimates the US PC sales contribute to about 15%-20 per cent of the operating profit for each of Dell, HP and Lenovo. S&P noted that Dell's contract manufacturers have already shifted their production of US-bound PCs outside China, while HP is expected to do so by June-end. It, however, cautioned that shifting PC assembly to the US would not meaningfully offset tariff risks, unless components like processors, memory modules and display panels sourced from Taiwan, South Korea and China are tariff-exempted by the US.
Time of India
8 hours ago
- Business
- Time of India
US tariffs: Smartphones, PCs may become expensive for customers, says S&P
NEW DELHI: Smartphones and personal computers (PCs) may become expensive as a result of manufacturers passing on the higher costs, arising from US tariffs , to end-consumers, S&P Global Ratings said. 'We expect PC and phone makers will pass on the higher cost to customers even if it leads to some demand destruction, especially for consumers who make up 45% of PC sales and most of smartphone sales,' the global credit ratings agency said in a research note, seen by ETTelecom . It noted that smartphone makers, such as Apple and its key suppliers, and personal computer (PC) manufacturers heavily reliant on China, are the most vulnerable to the US tariffs. 'S&P Global Ratings believes the most vulnerable companies are those with the largest reliance on China's integrated technology production infrastructure and the U.S. as a major end market,' it said in the research note. In particular, it said Apple and its key suppliers, including Hon Hai Precision Industry (Foxconn), may be the most disrupted due to reliance on China for production. Apple, with a shipment share of over 60% in the US market as of Q4 2024, faces a risk given its significant reliance on production in China. iPhones account for nearly 50% of Apple's revenue, with the US representing approximately a third of its global smartphone shipments, said S&P. The Cupertino-headquartered firm, however, has been shifting its production supply chain to India, which is expected to cover most of Apple's iPhone shipments to the US by 2026, the credit rating agency estimated. In turn, Korean Samsung 's bulk of production happens in Vietnam and India. 'Vietnam and India account for the bulk of Samsung's production base. Smartphone production is labor intensive, favoring production in countries with low labor costs such as India and Vietnam. Tariffs on these countries pose further risk for the issuers with significant U.S. smartphone exposure such as Apple and Samsung and their suppliers,' said S&P in its research note. Xiaomi is the only outlier that does not have direct exposure to the US consumer market. Its chips, too, are fabricated in Taiwan, and are unlikely to be a target of the US export restrictions, and neither will be subject to China's tariff on US goods. The Donald Trump administration has imposed a 10% baseline tariff on all countries, including India, with China also imposing reciprocal tariffs on the US. Notably, consumer electronics items, including smartphones and laptops, remain exempt from tariffs. However, Trump has threatened to impose a 25% tariff on all smartphone brands, particularly targeting Apple iPhones and Samsung handsets made outside the US, unless they are manufactured in America, the US media reported recently. Apple's vendors nearly doubled exports of iPhones from India in March–a majority to the US–to ₹20,000 crore, from ₹11,000 crore a year ago, ET reported in its April 7, 2025, edition. Recently, the International Data Corporation (IDC) projected that global smartphone shipments may grow by just 0.6% year-on-year to 1.24 billion units in 2025, down from the 2.3% year-on-year shipment growth it forecasted in February. 'Since April 2nd, the smartphone industry has faced a whirlwind of uncertainty. While current exemptions on smartphones have offered temporary relief, the looming possibility of broader tariffs presents a serious risk,' Nabila Popal, senior research director with IDC, said in a report separately. Popal added that despite complexities driven by geopolitical uncertainties and trade risks, India and Vietnam are expected to remain the key alternatives to China for smartphone production. 'However, additional tariffs of 20-30% on US-bound smartphones could post a serious downside risk to the current U.S. market outlook,' she had said. Laptop, PC makers also at risk Beyond smartphones, PC makers Dell, HP and Lenovo are also exposed to tariff risk. S&P said this is due to high input costs, from which tariffs are calculated, and high reliance on China for manufacturing laptops. Desktops, by contrast, are assembled across Asia and Mexico. The credit rating agency estimates the US PC sales contribute to about 15%-20% of the operating profit for each of Dell, HP and Lenovo. S&P noted that Dell's contract manufacturers have already shifted their production of US-bound PCs outside China, while HP is expected to do so by June-end. It, however, cautioned that shifting PC assembly to the US would not meaningfully offset tariff risks, unless components like processors, memory modules and display panels sourced from Taiwan, South Korea and China are tariff-exempted by the US.
&w=3840&q=100)
Business Standard
29-05-2025
- Business
- Business Standard
Vivo became top smartphone choice in India in Q1CY25, shows data
In the global market, Vivo phones do not make it to the top-10 list, and only Xiaomi's Redmi 14C 4G is the lone Chinese brand standing in the list at number eight Premium Surajeet Das Gupta New Delhi Listen to This Article Apple's iPhone 16 might be the hottest-selling smartphone in the world, with half of the top 10 models coming from its stable in the first quarter of calendar year 2025 (Q1CY25). But in India, the top honours go to Chinese mobile maker Vivo's Y29 5G model (starting from ₹13, 999), which was launched last December. Vivo has three out of the top 10 phones sold in India from the company in the same quarter, according to data from Counterpoint Research. The Cupertino-headquartered company might be a big exporter of its smartphones from the country, but iPhone 16 is only the
&w=3840&q=100)
Business Standard
23-05-2025
- Business
- Business Standard
Apple to pay 25% tariff on imported iPhones: US President Donald Trump
In a fresh salvo against Apple Inc, US President Donald Trump on Friday told the Cupertino-headquartered company it could face a tariff of 25 per cent if it manufactured iPhones in 'India or any place else' for sale in the United States (US). Trump's message on Truth Social indicated that he's already conveyed it to Apple CEO Tim Cook that all iPhones to be sold in the US must be manufactured there. The development coincides with India's talks with the US for a bilateral trade agreement during the 90-day pause in the 'reciprocal tax' announced by Trump earlier. The new warning comes soon after Trump's recent visit to West Asia where he publicly recounted his conversation with Cook that he should not 'build in India'' and that India can take care of itself. Top government officials in India, while declining comment, indicated that it's up to Apple to take a decision. A source said: ''It's a business decision that they have to take. It's their call on whether they would like to absorb the price hike due to increased tariffs.'' The company, it's learnt, has maintained that it would continue to invest in India and that its stance remains the same. Currently, Apple products are not manufactured in the US — the largest market for iPhones pegged at around $40 billion annually. At the moment, the contract manufacturers of Apple are going full steam to expand capacity in India, with two new iPhone assembly plants by Tata Electronics and Foxconn expected to roll out production soon. The Apple suppliers are also in the process of expanding the supply chain and capacity. The expansion was planned three years ago as part of Apple's strategy to shift more capacity from China to India. As part of the plan, Apple Inc has been looking to push its production capacity in India to $25-26 billion by FY26, from around $22 billion, which it hit in FY25. To achieve its US export plan however, it would require doubling the number to $40 billion-$45 billion (including the growth in the domestic sales in India) in the next 24 months, sources explained. On the latest development, experts explained that the 25 per cent tariff is not specific for India but is applicable to all smartphones including iPhones being imported to the US. A source listed out three scenarios for Apple—first, it can pass on the cost of the higher tariffs to US consumers with iPhone prices going up; second, it could ask the US government for a subsidy to bridge part of the cost differentiation like it has done for electric vehicles; third, there's a sense that the 25 per cent tariff is designed to provide protection to iPhone vendors who set up plants in the US against cheaper imports from India. Tarun Pathak, research director at Counterpoint Research said: ''We still think these are very initial days and might evolve into something very different.'' But he said that China and India will continue to play a key role in manufacturing operations for Apple. While stating that every government would like to bring manufacturing locally to their country in theory, he said there are a lot of moving parts in the practical world. ''Supply chains are all Asia heavy and won't move unless the US is giving massive subsidies to dilute disabilities, but even then it will take two to three years,''Pathak said.
Indian Express
17-05-2025
- Business
- Indian Express
India should lower tariffs – for the right reason
India shouldn't fret over US President Donald Trump telling Apple Inc's CEO Tim Cook not to make the country its next major manufacturing-cum-export hub after China. 'We put up with all the plants you built in China for years. We are not interested in you building in India,' Trump claims to have said. Delhi mustn't take that comment too seriously. Cook is ultimately accountable to the shareholders of Apple, which now makes about 40 million out of its 220 million-odd iPhones sold globally in India, and the balance from China. The Cupertino-headquartered tech giant's plans to expand its operations in India are purely a function of the cost-competitiveness of assembling handsets here and the perceived need to diversify supply chains from China as part of a larger geopolitical risk mitigation strategy. These are business decisions, not made overnight or unmade at the whim of one person, however powerful. India's focus should be on making itself a preferred investment destination for not just Apple, but all global companies that made China their factory to produce for the world. That would mean going beyond assembling to creating a full-fledged manufacturing ecosystem — of the sort already existing in India's automotive and ancillary sectors and needing replication in industries such as smart phones, computers and consumer electronics. All this requires economies of scale, which India can partly offer through its largely domestic market, like China's. But true cost-competitiveness and operational scale-up comes only from making for the domestic as well as global market. Trump's exhortation to Cook to confine Apple's make-in-India plans to only taking care of iPhone sales in India seems more like wishful thinking. And India must prove just that — through stable policies, making it worthwhile for Apple to deepen its engagement by expanding both production capacity and the local supplier base. India also does not have to show excessive concern over Trump's assertion of Delhi offering to 'drop all tariffs' on goods imported from the US. The fact is that the bilateral trade agreement between India and the US is still under negotiation. What's clear is that India is more open to cutting tariffs and offering greater market access for imports, just as it is seeking the same from its trade partners. This approach — a refreshing departure from the protectionist tendencies that gained hold during the first two terms of the Narendra Modi government — was noticeable in the recently sealed comprehensive trade deal with the United Kingdom. India's economic history, both pre- and post-reform, provides sufficient evidence of growth acceleration whenever policymakers have displayed openness to foreign trade and investment. Lowering tariffs and allowing greater import competition is something India should do for its own sake — and not because Trump says so.
