Apple Shifts iPhone Manufacturing from China to India
Apple has announced that it has started manufacturing its latest iPhone 14 in India as part of its strategy to diversify its supply chains away from China. While the majority of Apple’s phones are still produced in China, the company has been moving some production outside the country due to rising tensions between the US and China. Additionally, China’s ‘zero-Covid’ policies, which have resulted in widespread lockdowns, have caused significant disruptions for businesses during the pandemic.
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The tech giant’s decision to manufacture the iPhone 14 in India is significant. In a statement, Apple emphasized that the new iPhone line-up incorporates groundbreaking technologies and important safety features, and they are excited about producing them in India. Foxconn, based in Taiwan and responsible for manufacturing most of Apple’s phones, has been operating in the Indian state of Tamil Nadu since 2017, producing older versions of the handsets. However, Apple is now making a significant investment in India by manufacturing its newest flagship product, the iPhone 14.
Apple’s move to produce iPhones in India also aims to increase its market presence in the country, where it currently holds a market share of about 4%. The company has faced tough competition from more affordable South Korean and Chinese smartphones that dominate the Indian market. However, it’s important to note that manufacturing in India does not necessarily mean the iPhones will be cheaper within the country. High import duties on components and other taxes make it unlikely that the prices will significantly differ.
This announcement of increased iPhone production in India is a significant win for Prime Minister Narendra Modi’s administration. The Indian government launched the “Make in India” campaign eight years ago to boost manufacturing and exports in the country. Apple’s decision aligns with this initiative and demonstrates its commitment to diversifying its supply chains in response to growing tensions between China and the US, particularly regarding Taiwan and trade issues.
According to analysts at investment bank JP Morgan, around 5% of iPhone production is expected to shift to India this year, and by 2025, it is predicted that a quarter of all iPhone production will take place in the South Asian nation. Last year, Apple supplier Foxconn invested $1.5 billion in Vietnam, indicating its efforts to expand production beyond China. Reports also suggest that Foxconn has signed a $300 million agreement to further expand its facility in northern Vietnam to meet the increasing production demands.
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