A new report says that one in seven iPhones are now made in India – pointing to a significant acceleration in Apple’s work to reduce its dependence on China.
Apple’s reliance on China as its key manufacturing hub has been placing the company in an increasingly vulnerable position …
The risks of Apple’s dependence on China
The need for Apple to lessen its dependence on China as a manufacturing center has been clear for many years, but the impact of the pandemic at the world’s biggest iPhone assembly plant drove home the urgency. The COVID-19-related disruption was estimated to have cost the company a billion dollars per week.
More recently, growing political tension between the US and China has seen the government there discouraging its citizens from buying iPhones.
One in seven iPhones now made in India
Apple has long targeted India as its primary second manufacturing home. We’ve been hearing ambitious reports for some time now – that a quarter of all iPhones could be made in India by 2025, and that this could rise to half of all iPhones by 2027 – but progress has so far seemed relatively modest.
But the latest Bloomberg report suggests that significant progress has been made over the past year.
Apple Inc has assembled $14 billion worth of iPhones in India in fiscal 2024, Bloomberg News reported on Wednesday.
Apple now makes as much as 14% or about 1 in 7 of its marquee devices from India, the report said, citing people familiar with the matter.
Supplier diversification plans going less well
Indian iPhone assembly has so far been split between three suppliers, with 67% done by Foxconn, 17% by Pegatron, and 14% by Wistron/Tata (Wistron quit last year, complaining that Apple didn’t allow it to make a profit, with Tata taking over its production). That helped the Cupertino company reduce the related risks of over-dependence on a single supplier.
However, Pegatron and Tata have been working more closely together of late, with the latest report suggesting that the latter company is about to take over the operation of Pegatron’s sole iPhone plant in the country, potentially reducing Apple’s assembly roster from three companies to two.
The two companies are expected to form some kind of joint venture on a new plant, but we don’t yet know the details of how this will work.
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