Yesterday Apple’s Taiwanese manufacturing partner Hon Hai Precision (better known as Foxconn) told investors they have enough capacity outside of China to assemble iPhones for the US market. Most iPhone components are sourced outside of China but labor intensive assembly occurs within China. Apparently 25% of Foxconn’s production capacity is outside the mainland. This addresses concerns that Apple would need to either raise prices ~13-15% to offset potential tariffs or take a margin hit. Foxconn also indicated that investments are being made in India for Apple to expand production plants as a way to diversify the supply chain away from China.
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Sarah Kanwal
Equity Analyst, Director
Direct: 617.226.0022
Fax: 617.523.8118
Crestwood Advisors
One Liberty Square, Suite 500
Boston, MA 02109