Apple Analyst Craig Moffett Tells Clients: Moving All U.S. iPhone Production to India is Impractical

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Leading analyst Craig Moffett suggests that any plans to move U.S. iPhone assembly to India are unrealistic. Moffett, recognized as a top analyst multiple times by Institutional Investor, sent a memo to clients on Friday after reports indicated that Apple was aiming to shift production toward India from China by the end of next year. He questions how such a move could reduce costs associated with tariffs since the iPhone components would still be manufactured in China.

“You have a tremendous menu of problems created by tariffs, and moving to India doesn’t solve all of them. Now granted, it helps to some degree,” the MoffettNathanson partner and senior managing director explained during a recent CNBC segment. “I would question how that’s going to work.”

Moffett contends that diversifying to India is not a simple task—indicating that Apple’s supply chain would remain anchored in China and may face significant resistance. “The bottom line is that a global trade war is a two-front battle, impacting costs and sales. Moving assembly to India might (and we emphasize might) assist with cost concerns. However, sales may ultimately present a larger issue,” he wrote to clients.

On Monday, Moffett adjusted his Apple price target down to $141 from $184 a share, indicating a potential 33% decline from Friday’s closing price. This target is considered the Street low, according to FactSet. “I don’t think of myself as the biggest Apple bear,” he noted. “I think quite highly of Apple. My concern has been more about valuation than the company itself.”

Moffett has maintained a “sell” rating on Apple since January 7. Since then, the company’s shares have decreased by around 14%. “None of this reflects poorly on Apple as a company. They continue to have a strong balance sheet and a solid consumer franchise,” he emphasized. “However, the reality is that there are no good solutions when you are a product company facing significant tariffs, especially as you approach a market likely to experience some slowdown in consumer demand due to the macro economy.”

Moffett also pointed out that Apple isn’t receiving assistance from its carriers to alleviate the impact of tariffs. “You also have demand destruction due to potentially higher prices. Remember that major carriers have announced they will not absorb the additional costs associated with tariffs on handsets,” he remarked. “Consumers will have to bear that cost, leading to demand destruction that could manifest in longer device life spans and slower upgrade rates—factors likely to trim next year’s consensus estimates.”

He further noted that the backlash against Apple in China due to U.S. tariffs may negatively affect iPhone sales. “It’s a very real problem,” Moffett stated. “Sales volumes are increasingly leaning toward local competitors like Huawei and Vivo rather than Apple.”

Apple stock recently saw a week of gains, rising more than 6%, just ahead of the company’s quarterly earnings report scheduled for Thursday after market close.

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