Street View: India is Apple's "life raft supply chain" in trade war

Apple AAPL.O sees about $900 mln in tariff-related costs this quarter amid the US-China trade war

CEO Tim Cook says most iPhones sold in US this quarter will be India-made, and most iPads, Macs, Apple Watches will be from Vietnam; vast majority of non-US sales will still be from China-made products

Also cuts share buyback program by $10 bln; shares down 2.77% at $207.42 premarket on Friday

MITIGATING RISKS WITH STRATEGIC PRODUCTION SHIFTS

Morgan Stanley ("overweight," PT:$235) says Apple's supply chain shift can significantly reduce the tariff impact

Wedbush ("outperform," PT: $270) says, "India will be the 'life raft supply chain' that should help Apple navigate this unprecedented tense environment in China"

Morningstar (fair value:$200) says since China-made iPhones are the biggest tariff risks, "We expect more iPhone production to move to India as a result"

TD Cowen ("buy," PT:$275) says India is now producing most iPhones for US demand, exceeding expectations and Vietnam's capacity is sufficient for US demand for Macs, iPads, and wearables

Still, J.P. Morgan ("overweight," PT:$240) expects deceleration in YOY iPhone rev growth in Q4 and lower product gross margins due to the tariff challenges

Says besides tariffs, Apple faces local competition in markets like China and India, which can use pricing strategies to their advantage