Apple (AAPL) Stock: Tariff Exemptions and Record India Growth Offset China Decline

TLDR:

Table of Contents

Apple CEO Tim Cook discussed tariff impacts with Trump administration officials, warning iPhone prices could exceed $2,000
Trump administration exempted smartphones and electronics from recent tariff hikes on Chinese imports
Apple’s Q1 2025 shipments in China declined 9% year-over-year
India shipments hit a record 3 million units, growing 35.7% year-over-year
Apple is increasing iPhone exports from India to the US to avoid Chinese import tariffs

Tim Cook, Apple’s CEO, recently spoke with Commerce Secretary Howard Lutnick and other Trump administration officials about the potential impact of tariff increases on iPhone prices, according to a Washington Post report from April 17.

President Trump increased tariffs on 180 countries on April 2 before implementing a 90-day pause for all countries except China on April 9. For Chinese imports, tariffs were raised to 145% and later to 245% on April 15.

This posed a major challenge for Apple, which manufactures most of its products in China due to the country’s large skilled labor force in electronics, established supply chain, and cost advantages.

During discussions with White House officials, Cook expressed concern that Trump’s tariff hikes on Chinese imports would push iPhone prices above $2,000.

In what appears to be good news for the tech giant, on April 11, the Trump administration exempted smartphones, computers, and other electronics from the tariff hikes imposed on imports from China and other countries.

President Trump later mentioned his involvement, stating on April 14, “I speak to Tim Cook. I helped Tim Cook, recently, and that whole business.”

However, White House spokesman Kush Desai clarified that the administration didn’t grant “any exemptions” to specific companies. Instead, the approach is based on commitments from companies like Apple to increase manufacturing in the U.S.

Mixed Performance Across Markets

Apple’s first quarter of 2025 showed contrasting results in different regions. According to preliminary data from the International Data Corporation (IDC), Apple’s shipments in China, the world’s largest market, fell by 9% compared to the same period last year.

This marked Apple’s seventh consecutive quarter of decline in China. The drop is largely attributed to the company’s premium pricing, which limited its ability to benefit from new government subsidies in the region.

While the broader Chinese smartphone market grew by 3.3%, Apple was the only major manufacturer to experience decreased shipments. The company’s market share during the quarter dropped to 13.7% from 17.4% in the previous quarter.

Record Growth in India

In contrast to its Chinese performance, Apple achieved its best ever first-quarter results in India. The company shipped over 3 million iPhones, representing a 35.7% increase from the previous year.

This success in India was driven by various affordability initiatives, including no-cost monthly installment plans, cashback offers, and discounts from online retailers.

The iPhone 16 series, particularly the budget-friendly iPhone 16e, was especially popular, accounting for more than half of all shipments in India.

Apple outperformed competitors in India despite an overall contraction in the country’s smartphone market. The company achieved a 36.1% growth rate and rose to fourth position in market share.

Strategic Manufacturing Shift

Apple has recently increased its iPhone exports from India to the United States as part of a strategy to avoid high tariffs on Chinese imports.

To speed up deliveries, the company used air cargo to transport 600 tons of iPhones from Chennai to major U.S. cities including Los Angeles, New York, and Chicago.

This move highlights Apple’s growing dependence on India as a manufacturing hub and its efforts to diversify production away from China.

The shift comes at a critical time as trade tensions between the U.S. and China continue to affect global supply chains and pricing strategies for tech companies.

Apple stock currently has a Moderate Buy consensus rating on Wall Street, based on 18 Buys, 13 Holds, and three Sells assigned in the last three months.

The average Apple stock price target is $240.48, suggesting a potential upside of 22.08%.

Despite these challenges and changes, Apple continues to adapt its global manufacturing and distribution strategies to navigate the complex international trade landscape.

As the company balances production between China and emerging hubs like India, investors will be watching closely to see how these shifts impact Apple’s bottom line and future growth prospects.

The exemption of electronics from recent tariff hikes provides immediate relief for Apple, but the long-term implications of ongoing trade tensions remain to be seen.

Stay Ahead of the Market with Benzinga Pro!

Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders: