Apple starts manufacturing iPhones in India to reduce reliance on Chinese supply chain
The vast majority of Apple's production still takes place in ChinaBy Shawn Knight 9 comments
The big picture: The global pandemic likely prompted Apple to expedite diversification plans, revealing just how fragile the supply chain is when you have the majority of your eggs in one basket. Unfortunately, it's not as simple as just packing up and relocating. China has had decades to institute favorable government policies, and cheap labor in the region is plentiful.
Apple is now manufacturing some iPhone 13 handsets in India in a continued bid to better diversify production.
The Cupertino tech giant confirmed to The Wall Street Journal that it is now producing the current-gen iPhone in India. A separate source told Reuters that contract manufacturer Foxconn is handling production in the town of Sriperumbudur in Southern Tamil Nadu state.
Apple has been looking to reduce its reliance on China for years, but the going has been slow. According to estimates from Counterpoint Research, China accounted for a whopping 95.3 percent of Apple's global manufacturing operations in 2021. India was responsible for 3.1 percent of Apple manufacturing last year, a figure that is expected to climb to as high as seven percent by the end of this year.
To become a viable competitor, India will need to invest more in shipping and logistics and implement even friendlier trade ties with Western countries. Labor and pay disputes have also been an issue in the past.
Apple has assembled other iPhones in India before including the iPhone 11, iPhone 12 and iPhone SE. The company's first retail store in the region is expected to open later this summer when India celebrates its independence.
Image credit Daniel Romero, Almas Salakhov