Supply chain diversification amid US-China geopolitical conflict
Confidence in India’s ability to produce cutting-edge products
India’s ‘Production Linked Incentive (PLI) System’ is also an attractive factor
Apple’s decision to produce its new iPhone 16 series in India is being interpreted as a significant shift in corporate strategy as it seeks to diversify its supply chain amid geopolitical conflict between the United States and China.
Apple produces its high-end smartphone models in China, while India produces mostly lower-end and older versions of the iPhone.
Nine to Mac, an American information technology (IT) media outlet specializing in Apple news, reported in July that “Apple plans to produce high-end models of the iPhone 16 series at its Indian factory for the first time this year.”
The iPhone series is divided into four models: Basic, Plus, Pro, and Pro Max. Last year, Apple entrusted the production of the basic model of the new iPhone to Taiwanese Foxconn’s local factory in India for the first time. This time, it is highly likely that the company will expand the production ratio in India for the main models, Pro and Pro Max, Nine to Mac reported.
Analysts interpret Apple’s change of production base as a reflection of the worsening US-China relationship and an increase in confidence in India’s ability to produce cutting-edge products, Hong Kong’s South China Morning Post (SCMP) reported on the 13th.
“The move reflects a broader shift by major technology companies like Apple, Microsoft and Amazon to shift production out of China due to a range of security and economic risks,” said Kartik Naziappan, a research fellow at the National University of Singapore’s South Asian Institute.
“India is best positioned to support this transformation and has done so through a series of policies, incentives and subsidies,” he said. A prime example is the Production Linked Incentive (PLI) scheme, which provides subsidies to hardware companies in India.
Apple first began assembling iPhones in India in 2017 and has increased production in recent years.
According to market research firm Canalys, Apple will produce about 15 million iPhones in India in 2022, up from 25 million last year. That would account for about 12% of Apple’s total production.
In the first half of 2024, Apple is expected to produce at least 18 million phones in India, and that figure is expected to account for 23% of total production by the end of 2025, the SCMP reported.
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2024-09-14 00:34:39