Apple boosts iPhone production in India, diversifies away from China

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Technology giant Apple has reportedly manufactured a whopping $14 billion worth of iPhones in India during the last fiscal year. This significant production milestone marks a strategic shift for the company, as it continues to reduce its reliance on China for manufacturing.

As tensions between the U.S. and China escalate, Apple has been actively diversifying its supply chain, with a particular focus on expanding production in countries such as Vietnam and India. This move represents a significant departure from Apple’s traditional manufacturing base in China.

According to reports, Apple now produces approximately 1 in 7, or 14%, of its iPhones in India, which is twice the amount it manufactured there just last year. Pegatron, one of Apple’s key manufacturing partners, assembled around 17% of these iPhones, while Foxconn accounted for approximately 67% of the production. Wistron, another key partner, handled the remaining production.

The shift towards India as a manufacturing hub was further underscored by a high-profile meeting between Apple CEO Tim Cook and India’s Prime Minister, Narendra Modi, in June 2023. Following the meeting, Cook expressed his optimism about India’s potential, referring to it as a “huge opportunity” for Apple. This sentiment was echoed by the company’s decision to open its first retail stores in India last year.

While China remains a critical market for Apple, recent reports suggest that the company is facing challenges in the region. A Counterpoint Research report from March revealed that iPhone sales in China had declined by 24% in the first six weeks of 2024. The report attributed this decline to stiff competition from other smartphone vendors, particularly Huawei.

Apple’s increasing focus on India not only highlights the company’s commitment to diversifying its supply chain but also underscores its strategic efforts to tap into new markets and reduce its dependence on China. As Apple continues to navigate the complex landscape of global manufacturing and sales, its moves in India are sure to be closely watched by industry analysts and competitors alike.

(Source: Bloomberg | CNBC | The Quartz)

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