Apple has asked manufacturers to shift production from China amid geopolitical tensions and pandemic restrictions.
Apple Inc will make some of its iPhone 14s in India, the company has said, as manufacturers shift production from China amid geopolitical tensions and pandemic restrictions that have disrupted supply chains for many industries.
“The new iPhone 14 lineup introduces groundbreaking new technologies and important safety capabilities. We’re excited to be manufacturing iPhone 14 in India,” Apple said in a statement on Monday.
Apple unveiled its latest lineup of iPhones earlier this month. They will have improved cameras, faster processors and longer-lasting batteries at the same prices as last year’s models.
India is the world’s second-largest smartphone market after China, but Apple iPhone sales have struggled to capture a large share of the market against cheaper smartphones from a range of Chinese brands.
Bloomberg News had reported last month that the company was planning to manufacture some of its iPhone 14 in India.
The announcement from the Cupertino, California-based company dovetails with Prime Minister Narendra Modi’s push for local manufacturing, which has been a key goal for his government since he took office in 2014.
The tech company first began manufacturing its iPhone SE in 2017 and has since continued to assemble a number of iPhone models there. Apple opened its online store for India two years ago, but the pandemic has delayed plans for a flagship store in India, according to local media reports.
The latest model will be shipped out by Foxconn, a major iPhone assembler whose facilities are on the outskirts of Chennai, a city in southern India.
Diversify supply chain
Apple is likely to shift about 5 percent of its iPhone 14 production to India from later this year, raising it to 25 percent by 2025, according to a JP Morgan report quoted by the Press Trust of India news agency.
The analysts expect nearly a quarter of all Apple products will be manufactured outside China by 2025, compared with about 5 percent now. Supply chain risks like the stringent COVID-19 lockdowns seen in China are likely the trigger for such relocation efforts that will continue over the next two or three years, the report said.
“Apple has been trying to diversify its supply chain for a while, but these efforts have grown in the last two years over trade sanctions between the US and China,” said Sanyam Chaurasia, an analyst at Canalys.
Last year, the tech giant manufactured about 7 million iPhones in India. This news is likely to significantly increase India-made Apple smartphones, he added.
He said the plan to make more iPhones in India may also lead Apple to drop its prices for the Indian market, making it more competitive. “You can adopt a more aggressive pricing strategy if you manufacture locally,” Chaurasia said.
Most of Apple Inc’s smartphones and tablets are assembled by contractors with factories in China, but the company started asking them in 2020 to look at the possibility of moving some production to Southeast Asia or other places after repeated shutdowns to fight COVID-19 disrupted its global flow of products.
Apple has not released details, but news reports say the company planned to set up assembly of tablet computers and wireless earphones in Vietnam.
Other companies are keeping or expanding manufacturing in China to serve the domestic market while shifting export-oriented work to other countries due to rising wages and other costs, as well as the difficulty for foreign executives to visit China due to COVID-19 travel restrictions.