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Apple shifted iPhone Production from China to India

  • Posted on November 6, 2022
  • News
  • By Akta Yadav
  • 218 Views
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According to industry insider information, Apple's contract manufacturers in India, Foxconn,
Wistron, and Pegatron, are expanding their facilities by adding more assembly lines to make up
for a drop in iPhone production in China due to the impending Chinese New Year and high local
demand.
The ongoing lockdown at Foxconn's plant in Zhengzhou, China, the biggest iPhone
manufacturing facility in the world, won't prompt Apple to immediately increase production in
India, they added. This is because it is simpler for Foxconn to merely move production to
another facility within mainland China than it would be to import components to India, which
would take longer and be more expensive, according to experts. Additionally, the Indian
partners lack the technical expertise and capacity yet.
Given that the peak holiday season is over and that October to December is typically a slow
quarter, market experts also anticipate a limited impact on India shipments from the temporary
reduction in iPhone output in China.
As per Navkender Singh, associate vice president of IDC India, moving production from China
to India shortly will be challenging and time-consuming because it requires knowledge of
building more advanced models, additional production lines, and certifications from the Bureau
of Indian Standards (BIS) and other organizations.
"I believe that the shift to India will occur regardless of the current situation. Apple's Make in
India initiative will continue to gain momentum, predicted Prabhu Ram, head of CMR's industry
intelligence group. To survive the cuts, Foxconn has already moved production to Shenzhen.
Instead, Apple is synchronizing its increased production in India with the Chinese New Year in
February, a time when the US smartphone giant anticipates a labor shortage. This is related to
Apple's intention to lessen its reliance on Chinese manufacturers, according to experts. "All
three of Apple's Indian contract manufacturers have increased their production capacities, "said
one of the executives with knowledge of the situation.
While Wistron manufactures iPhones in Bengaluru, Foxconn and Pegatron have their facilities in
Tamil Nadu. The iPhone SE, iPhone 12, iPhone 13, and iPhone 14 (basic) models are currently
produced by Apple in India. However, every Pro model offered for sale in the nation is an
import.
Apple is already importing and approving parts for the iPhone 14 Plus model in India, according
to IDC's Singh. "They might be delaying production because there isn't much demand."

At their facility in the industrial area of Kolar, Wistron currently has four assembly lines for the
production of the iPhone 14. One in Peenya, Bengaluru, is out of service, and Apple product
repairs take place in a third location.
According to another executive, Foxconn is currently hiring for the expansion of one of its
factories in India that is close to its facility in Chennai. In September, Pegatron began producing
iPhones for Apple for the first time.
China's share of the world's iPhone production is anticipated to decline from 95.8% in 2021 to
91.2-93.5% of global shipments in 2022. By the end of this year, India will contribute 5-7% of
global shipments and 85% of local demand, up from 3% last year, predicts Counterpoint
Research.
Increasing demand for premium smartphones supported by discounts and cashback offers is
expected to cause Apple's India shipments in 2023 to surpass the record 6 million units
anticipated in 2022, according to IDC India. In 2021, Apple shipped 4.8 million units.
As a result of the PLI program, which was introduced in April 2020 to lure manufacturers away
from China and other mobile-manufacturing nations, India's monthly mobile exports surpassed
the $1 billion mark for the first time in September. These exports were primarily driven by Apple
and Samsung, who together accounted for roughly 75–80% of exports.
According to the plan, foreign businesses must produce additional goods worth Rs 4,000, Rs
8,000, Rs 15, 000, Rs 20,000, and Rs 25,000 from the beginning to the end.
To diversify its manufacturing base, which is currently heavily reliant on China, Apple plans to
move 25% of its iPhone production to India by 2025 and 5% of the global iPhone 14 production
there by the end of 2022.
Foxconn and Wistron met the first-year targets in FY22, and all three manufacturers are a part
of the government's Rs 41,000 crore production-linked incentive program (PLI). Pegatron began
producing iPhones this year and will be able to file for benefits in the following fiscal year
through March 2023.

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Akta Yadav

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