iPhone production in India to ‘deepen’; Apple’s medium-term plans
A new report claims to reveal more about Apple’s medium-term plans to expand and “deepen” iPhone production in India as it works to reduce its reliance on China.
It follows and supports yesterday’s suggestion that enough iPhones for the entire US market could be made outside China within three to five years…
Steve Jobs originally transferred most Apple manufacturing to China because it was the only country in the world with a huge ready-made supply-chain network, and the ability to scale up production almost overnight.
This was due to the Chinese government having spent more than 40 years creating the conditions needed to become the manufacturing center of the tech world.
It has become increasingly clear over the years, however, that Apple’s dependence on China for the bulk of its production is the single greatest risk facing the company. There have recently been increasing signs of the Cupertino company accelerating its plans to reduce this reliance.
iPhone production in India accelerating rapidly
When Apple first started iPhone production in India, it was only the (original) iPhone SE, and only models for sale within the country. Since then, more and more models have been added, including the iPhone 14.
While Foxconn has taken the lead on assembling the latest models, the Financial Times reports that all three of Apple’s iPhone assembly partners are now making the iPhone 14.
Three Taiwanese companies that already work for Apple in India Foxconn, Pegatron and Wistron will be putting the 14 together at their sites in the country’s south, two people familiar with the secretive US company’s operations said.
That would represent a dramatic acceleration in the company’s plans, but is in line with other recent reports. It was believed that Apple had originally intended to begin iPhone 14 production simultaneously in China and India, and that it had only narrowly missed this goal. This is now expected to happen for the iPhone 15.
JP Morgan last month suggested that a full 25% of all iPhone assembly could happen in India by 2025.
Apple to “deepen” iPhone production in India
At present, iPhone production in India comprises only final assembly. The components, including plenty of pre-assembled elements, are imported from China.
However, the Indian government says it is “supporting” Apple in moving towards local production of at least some of the components.
Ashwini Vaishnaw, India’s railways and IT minister, said the country’s government was “actively encouraging and supporting” Apple’s investments and efforts to build a supply chain in India […]
“All industries begin with bringing product assembly,” Vaishnaw said. “In the next phase two to four years this goes deeper, when components and modules manufacturing begins and a full-fledged local ecosystem gets created.”
There is precedent for this in car manufacturing, where companies like Maruti Suzuki began with final assembly in India, and have since established an extensive supply chain within the country.
Nothing is simple
However, much as tensions between the US and Chinese governments are one of the reasons Apple wants to move production out of the country, there are concerns that tensions between India and China could hamper the plans.
There have been (semi-comical) physical conflicts over the long-running border dispute between the two countries in the Himalayan region. The border has historically been only vaguely defined by natural features like rivers and lakes, but melting snow can shift these landmarks.
Additionally, China is unlikely to welcome India’s ambitions to become a major competitor in tech manufacturing – especially when India has done things like banning Chinese apps.
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