HomeAmericasBusinessChina Unrest: Apple Fasts Forwards Plans to Move Manufacturing to India

China Unrest: Apple Fasts Forwards Plans to Move Manufacturing to India

China Unrest: Apple Fasts Forwards Plans to Move Manufacturing to India

NEW DELHI, (IANS) – Apple is fast-forwarding its manufacturing plans in India and Vietnam in the wake of China unrest over its zero-Covid policy which has severely disrupted its supply chain, leading to an acute shortage of new iPhone 14 Pro models.

The Wall Street Journal reported that the company is “telling suppliers to plan more actively for assembling Apple products elsewhere in Asia, particularly India and Vietnam” to “reduce dependence on Taiwanese assemblers led by Foxconn”.

The China upheaval, which hit its key supplier Foxconn’s Zhengzhou factory last month resulting in violent protests, means “Apple no longer feels comfortable having so much of its business tied up in one place,” the report said, citing analysts and people in the Apple supply chain.

Apple aims to ship 40-45 percent of iPhones from India compared with a single-digit percentage currently, according to famed analyst Ming-chi Kuo.

Kuo has predicted that iPhone shipments in the fourth quarter this year are likely to reach around 70 million to 75 million units, nearly 10 million less than market projections before the China turmoil.

The top-of-the-line iPhone 14 Pro and Pro Max models have been particularly hit hard, according to him.

Every fourth iPhone will be made in India by 2025, according to J.P. Morgan.

In a fillip to India’s thrust on local manufacturing, Apple earlier this year kicked off the production of new iPhone 14 in India, a first for the tech giant as it narrows down the manufacturing period of new iPhones in the country to cut dependence on China.

Buoyed by the ease-of-doing business and friendly local manufacturing policies, Apple’s ‘Make in India’ iPhones will potentially account for close to 85 percent of its total iPhone production for the country this year, according to industry experts.

The import of iPhones to India is likely to come down to 15 percent this year (from 50 percent in 2019), while domestic manufacturing by the Cupertino-based tech giant is set to go up substantially to 85 percent, according to market intelligence firm Cybermedia Research (CMR).

With the iPhone 14 series, Apple’s iPhone production in India is slated to jump from 7 million iPhones in 2021 to touch a new milestone of around 12-13 million iPhones in 2022.

As per CMR, the contribution of domestic iPhone manufacturing in India jumped from 50 percent in 2019 to 73 percent in 2021.

In the meantime, the percentage of imported iPhones to India decreased from 50 percent in 2019 to 45 percent in 2020, 27 percent in 2021, and around 15 percent this year — showing a significant make in India’s boom for Apple.

Apple first started manufacturing iPhones in India in 2017, with iPhone SE.

The tech giant manufactures some of its most advanced iPhones in the country, including iPhone 11, iPhone 12, and iPhone 13 at the Foxconn facility while iPhone SE and iPhone 12 are being assembled at the Wistron factory in the country.

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  • I welcome this decision. I just wish that the Indian government is doing its best to insure the relationship is based on a long-term strategy.

    December 5, 2022
  • India has the greatest opportunity to create the most favorable environment for Apple to continue to manufacture and expand by leaps and bounds. If Apple succeeds, India will be doubly proud of making a huge contribution towards a high tech production in India. It is a high prestige. Apple’s continuing success will lead to other major tech giants to come to India instead of other destinations like China.
    I am sure Prime Minister Modi and the Chief Ministers of Tamil Nadu, Karnataka, and U.P. will play a great role.
    I am sure Apple will succeed. IBM India is the 2nd largest private employer after Tata employing 150,000. This is more than IBM in the USA.
    Apple deserves Maharaja or red carpet treatment. Congratulations to the leadership of India and Apple.

    December 29, 2022

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