Apple’s plans to shift production of iPhones from China to India by the end of next year have been met with skepticism from leading analyst Craig Moffett. Moffett, a top-ranked analyst by Institutional Investor, sent a memo to clients questioning the feasibility of such a move.
In his memo, Moffett highlighted the challenges of moving production to India and how it may not necessarily bring down costs associated with tariffs. He pointed out that while assembly may move to India, the components would still be made in China, creating a complex supply chain scenario.
Moffett emphasized that diversifying to India is not a straightforward solution, as Apple’s supply chain would still be heavily anchored in China. He also raised concerns about potential resistance the company may face in India.
The analyst also expressed concerns about the impact of global trade tensions on Apple’s sales and profitability. He noted that moving assembly to India may help with cost-related issues, but the broader issue of slowing consumer demand could pose a bigger challenge for the tech giant.
As a result of his analysis, Moffett lowered his price target for Apple to $141 from $184 a share, representing a 33% drop from Friday’s closing price. He clarified that his concerns are more related to Apple’s valuation rather than the company’s fundamentals.
Moffett has maintained a “sell” rating on Apple since January, and the company’s shares have declined by about 14% since then. He highlighted the challenges faced by product companies like Apple in a tariff-heavy environment, where higher prices could lead to reduced consumer demand.
The analyst also pointed out that Apple is not receiving support from its carriers to offset the impact of tariffs, further complicating the company’s outlook. He warned that the backlash against Apple in China over U.S. tariffs could hurt iPhone sales in the region.
Despite these challenges, Apple’s stock saw a 6% increase last week, ahead of the company’s upcoming quarterly earnings report. The tech giant is set to release its earnings next Thursday after the market close.
Overall, Moffett’s analysis raises important questions about Apple’s strategy amid ongoing trade tensions and the potential risks associated with shifting production to India. Investors will be closely monitoring the company’s performance in the coming months to assess how it navigates these challenges.
