In a strategic move, Apple plans to reshape its iPhone production scheme, transitioning from a predominantly China-based model to increasingly leveraging the thriving market in India. The goal for 2023 is to have India’s iPhone production pace nearly match China’s, a significant leap from the near-year difference we’ve previously seen.
Since its 2007 launch, the iPhone has mostly been a product of China, with 95% of worldwide production happening within the country’s borders. However, Apple’s latest plan aims to break the “Assembled in China” mold, spreading production efforts to multiple locations. In fact, the tech giant is keen on producing at least one fifth of the much-anticipated iPhone 15 in India.
Reports from Nikkei detail Apple’s new strategy. The tech company seeks to manufacture intermediate parts, such as metal casings, locally in India, moving away from the past approach of just assembling pre-made components. Additionally, Apple is looking to relocate significant iPhone product development resources from China to India. This would imply the deployment of a substantial number of engineers and the establishment of many new labs.
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Apple’s move toward India can be attributed to a variety of factors. Tensions between the U.S and China under the Biden administration have not significantly improved, presenting potential complications for Apple in the future. On a more positive note, predictions indicate that India will have a billion smartphone users by 2026. With its vast potential market, India could be the key to Apple’s future growth strategy.
“India’s appeal lies in its huge market, low-cost workforce, and attractive government incentives,” notes Prachir Singh, a Counterpoint analyst based in India. “We’re poised to witness a substantial shift in this direction.”
As the iPhone 15 announcement is around the corner, all eyes will be on India to see how well it manages a concurrent launch with China. Over the next few years, it will be interesting to see India’s share in iPhone production climb.