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Apple’s iPhones are now produced in India. Sometime in the fall of 2023

Published

1 year ago

April 13, 2023

Apple’s iPhones are now produced in India. Sometime in the fall of 2023, Apple will probably attempt to produce the upcoming iPhones in India at the same time as they are in China

Last fiscal year, Apple Inc. assembled more than $7 billion in iPhones in India, tripling production in the world’s fastest-growing smartphone market after accelerating its expansion beyond China.

According to people familiar with the matter, the US company now manufactures nearly 7% of its iPhones in India through expanding partners ranging from Foxconn Technology Group to Pegatron Corp. That represents a significant increase for India, which is expected to account for 1% of the world’s iPhones in 2021.

As tensions between Washington and Beijing continue to rise, Apple is looking into ways to lessen its reliance on China. According to the people, who asked to remain anonymous because the information is private, its longtime partners, who manufacture the majority of the world’s iPhones in vast factories in China, have added assembly lines at a rapid rate over the past year.

The chaos at Foxconn’s primary “iPhone City” complex in Zhengzhou last year, which highlighted weaknesses in Apple’s supply chain and compelled it to lower output projections, made the world’s most valuable company struggle. Additionally, a slew of incentives have been given out by Indian Prime Minister Narendra Modi to encourage domestic manufacturing.

Apple exported $5 billion worth of iPhones in the year that ended in March 2023, nearly four times as many as the year before, according to the people. Sometime in the fall of 2023, Apple will probably attempt to produce the upcoming iPhones in India at the same time as they are in China. If so, it will mark the first occasion when iPhone assembly starts simultaneously in both nations. Additionally, if its suppliers’ aggressive expansion continues, Apple may assemble 25% of all its iPhones in India by 2025. The US company’s representatives declined to comment.

Apple knew it needed to diversify its supply chain even before last year’s iPhone city uproar. It was successful in pushing for incentives in India and pressuring the localization of suppliers Foxconn, Wistron Corp., and Pegatron. The three companies, which collectively employ 60,000 people in India, produce models there ranging from the dated iPhone 11 to the most recent iPhone 14.

This has made it easier for India to pursue its goals of becoming a significant manufacturing hub and China’s rival. When it comes to manufacturing, Apple is one of the most meticulous companies in the world. Its global production chain employs millions of people, the majority of whom are now in China.

An economic victory for India has been achieved with the relocation of iPhone production, and this development may have repercussions for how other US brands envision their futures. At a time when the Chinese economy is sputtering as a result of years of harsh Covid Zero restrictions, the nation itself represents for Apple a source of future growth.

Next week, Apple will debut its first two retail locations in India, one in Mumbai, a major financial center, and the other in New Delhi, the country’s capital. Tim Cook, the chief executive, will fly in to personally open the two stores, highlighting the growing significance of the domestic market.

As part of its effort to increase local production and build megafactories, Cupertino, California-based Apple has also asked for changes to India’s labour laws.

Foxconn, its largest contract manufacturer, plans to spend $700 million building a plant in a southern state to produce phone parts and perhaps iPhones. Requests for comment from representatives of Foxconn, Wistron, and Pegatron were not immediately fulfilled.

Bloomberg Intelligence’s Opinion

Although reducing dependence on China’s dominance in the technology supply chain will be difficult, our analysis suggests that dependence could be reduced by 20–40% in the majority of cases by 2030. While emerging efforts to diversify geographically are being sparked by geopolitical tensions as well as government and corporate policies, it will take years of investment to significantly untangle from China’s complex, effective, and skilled supply chain from semiconductors to hardware to assembly.