Apple intelligence: It’s time to step up and speak out

That Trump wants iPhone assembly done in the US made many of us sit up, given the anticipation in India of an influx of this job-creating activity from a barrier-facing China. But it should not raise eyebrows. It’s part of Trump’s ‘America First’ agenda. What should worry us are signals that go beyond autarky talk, a language that India has long learnt the uses and limits of. 

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Only if Apple actually does as directed—or nudged, in this case—would it count as such a signal. After all, America’s formula for prosperity includes letting free markets direct most flows of capital, instead of a central authority playing this role. As a business that must maximize shareholder value, Apple ought to invest where its market reading leads it to, not by diktat. 

Should it ‘onshore’ its iPhone making against its interest, it would expose an irony at the core of Apple as an iconic brand. In 1984, it smashed its way to fame by taking on a fictional autocrat in an advertising campaign. In symbolic terms, an Uncle Sam going Big Brotherly poses this brand a real-world test.

In the year ended 28 September 2024, Apple Inc posted a net income of $93.7 billion on sales of $391 billion. Over half its revenues are from iPhones, whose offtake has been flat for some years, with a slump in China and handset upgraders elsewhere fretting over its slow progress on Apple Intelligence, its AI gambit. 

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While Cook has reportedly pledged investment of $500 billion in the US over Trump’s term, this is aimed chiefly at AI research and infrastructure. Ripping up gadget supply chains in Asia to re-plant in America would replicate sunk costs. Yet, moving the making of US-bound iPhones—estimated at 70 million units per year—from China to India could cushion Apple’s geopolitical risk. With world trade turned topsy-turvy by Trump, a sudden shift may pivot on the difference in US barriers for goods shipped in from Asia’s Big Two. 

As of now, US smartphone imports have an interim reprieve from ‘reciprocal’ tariffs. But since Chinese shipments face a 20% punitive levy over China’s alleged role in America’s opioid crisis, India has an edge. Still, with Beijing also in talks with Washington now, which way the chips will fall is hard to predict.

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Trump making such a big deal of where Apple’s top-sellers are made seems odd, given how its Asian strategy has enriched its American owners for years. Only a sliver of the value generated by the company accrues to gadget assemblers. But then again, this is about labour, or jobs, not capital. Even so, at stake here for America is the efficiency of its capital allocation, which could get warped if the White House plays director by nudging investment choices while singing odes to ‘America First’ amid a game of musical tariffs. 

US intervention in the market for world trade has already sent shock waves across oceans. Now another tariff rejig may occur two-three weeks hence. Whatever shape Trump’s policy reset takes, the more it gets in the way of free enterprise or distorts private incentives, the less competitive America may find itself. Casual flouting of free-market norms might also threaten US leadership of global capital. If Apple Intelligence must get up to speed, so must its stance on distortions. Maybe a good prompt could help this company make its case.