Apple has announced that the group’s latest iPhone model will also be manufactured on the subcontinent. So you probably want to be less dependent on China.
Apple will now not only produce its latest iPhone model in China, but also in India. A statement from the company over the weekend said it was “excited to manufacture the iPhone 14 in India.”
It was not initially known in which plant production would begin. Nevertheless, the announcement is an important sign for Apple: it usually takes months or even years before the current iPhone model is also manufactured outside of China, since the start of production in other regions of the world takes time. With the iPhone 14, Apple has obviously succeeded in speeding this up.
switching to other countries
So far, the iPhone group has manufactured its most important product primarily in the People’s Republic. However, parts of the production have also been carried out in India and Brazil for a number of years; Vietnam, which already manufactures iPads and AirPods, is another possible location for the iPhone. Initially, only older iPhones were built outside of China; sometimes also those that are only offered in emerging markets. In Brazil this should still be the case. Apple now has much more outstanding plans on the subcontinent – the country is said to deliver significantly more iPhones than before.
According to analysts, around five percent of all iPhone 14 models could be assembled in India by the end of 2022 – but it is unclear whether the Pro variants are included here. The devices are likely to be sold primarily locally, the subcontinent is now the second largest smartphone market after China and has an aspiring middle class. By 2025, one in four iPhones could be manufactured in India, according to bank JPMorgan. This would give significant impetus to Apple’s plans to diversify its manufacturing.
Production in China is becoming more difficult
Apple is increasingly struggling with production problems in China – even though most of its own supply chain is located there. In spring, for example, there were renewed corona lockdowns in several cities in which Apple is involved via its contract manufacturers, which led to production interruptions. Even now it still happens that the People’s Republic has entire cities cordoned off. Apple had previously tried to find alternatives due to the deteriorating trade relationship between the United States and China. This led to punitive tariffs under the Trump administration – but the new President Joe Biden is also taking a hard line towards Beijing. In return, the Communist Party puts pressure on local producers, including Apple and its manufacturers.
However, the production in India is not completely problem-free. Apple is said to have difficulties in complying with confidentiality standards that are very important to the group. There were also problems in complying with occupational safety standards. Furthermore, Apple has to “rebuild” its gigantic supply chain in India, which has existed in China for decades. Many parts for the iPhone are therefore first imported to India in order to be finally assembled. It will probably be a long time before sufficient suppliers for the iPhone have established themselves on the subcontinent.