The notion of moving Apple’s iPhone production to the United States has been dismissed as a “fairy tale” by Dan Ives, the global head of technology research a༺t Wedbush Securities. Speaking on CNBC’s “Fast Money,” Ives articulated the immense challenges and 🐈impracticalities of such a shift, especially in light of President Donald Trump’s recent tariff threats targeting Apple and other tech giants. According to Ives, the idea of domestic iPhone production is akin to a “Pinocchio story,” far removed from the realities of global supply chains and cost structures.

Ives estimates that relocating even 15 to 20% of Apple’s supply chain to the U.S. would take four to five years and cost between $20 billion and $30 billion. More strikingly, he warns that producing iPhones in the U.S. could result in retail prices skyrocketing to $3,500 per unit, a figure that would likely trigger significant demand destruction. As reported by Yahoo Finance, Ives emphasized that Apple’s current strategy of pivoting production to countries like India is a more feasible response to geopolitical pressures, but even this move caꦇnnot fully shield the company from the impact of a tariff-driven trade war.

Unpacking the Supply Chain Complexity

The complexity of Apple’s supply chain, spanning multiple countries including Chiꦅna, Taiwan, and Vietnam, makes a U.S.-centric model nearly impossible in the short term. Ives, drawing from his 25 years of experience in the tech se꧋ctor and extensive time spent in Asia, highlighted the intricate dependencies on foreign semiconductor fabrication plants and raw materials. He rhetorically questioned the feasibility of such a move by suggesting that if consumers are willing to pay $3,500 for an iPhone, production could theoretically shift to places like New Jersey. However, the reality of replicating Asia’s manufacturing ecosystem in the U.S. remains a distant prospect.

Beyond semico﷽nductors, the broader issue of intellectual property, chip design, and raw material sourcing adds further layers of difficulty. I🀅ves noted that even industry leaders like Nvidia are grappling with similar supply chain constraints, underscoring that this is not just an Apple problem but a systemic challenge for the tech industry. As covered by Fox Business, analysts agree that any attempt to localize production would drive up costs significantly, with ripple effects across consumer pricing and market competitiveness.

Tariffs and Consumer Impact

The tariff threat, which could impose a 25% levy on iPhones sold in the U.S. but manufactur🐼ed overseas, places Apple in a precarious position. Ives argues that Apple is unlikely to absorb such costs and would instead pass them on to consumers, potentially leading to a 3 to 7% drop in demand. This comes at a time when Apple has not raised iPhone prices in years, and any increase—whether due to tariffs or new features like AI unveiled at events like WWDC—could test consumer tolerance.

Moreover, Ives sees Apple’s situation as a high-stakes poker game with th🌠e Trump administration. He speculates that Apple might commit to a gradual increase in U.S. production by 2027 as a negotiating tactic, b🔯ut he remains skeptical of any meaningful shift. As Investing.com reported, the consensus among analysts is that Apple’s global supply chain is too entrenched to uproot swiftly, leaving the company caught in the crosshairs of trade policy.

Navigating the Future

Despite these challenges, I💮ves remains o🐓ptimistic about Apple’s long-term prospects, particularly in areas like AI and its massive installed base. He views upcoming events like WWDC as critical opportunities for Apple to showcase innovation, even as tariff clouds loom large. However, the immediate reality is stark: Apple finds itself “back against the wall” in what Ives describes as a “Twilight Zone day” for investors.

Ultimately, the dream of U.S.-made iPhones remains elusiv🦹e. Ives’ analysis, echoed across industry reports, suggests that while Apple can pivot strategically to mitigate risks, the fundamental economics and logistics of domestic production are currently out of reach. For now, the tech giant must navigate a delicate balance between innovation, cost management, and geopolitical pressures.