Apple exported over $2.5 billion worth of iPhones from India from April to December. That’s nearly double the previous year’s total, highlighting an accelerating shift away from China by US tech giants amid heightened geopolitical tensions.
Foxconn Technology Group and Wistron Corp. each shipped more than $1 billion worth of Apple marquee devices overseas in the first nine months of the fiscal year ending March 2023.
Another of Apple’s major contract manufacturers, Pegatron Corp., plans to move about $500 million in gadgets overseas by the end of January, said the people, who asked not to be identified.
Apple’s rapid increase in exports has been forced to lower its production estimates after Foxconn’s disruption at its main factory in Zhengzhou exposed a vulnerability in the Cupertino-headquartered company’s supply chain. It shows how we are strengthening our business abroad.
This exacerbated the wider problem of demand for electronics evaporating as consumers weigh the risk of a global recession.
Apple, the world’s most valuable company, only started assembling its latest iPhone models in India last year, due to a huge Chinese factory run by major Taiwanese assemblers such as Foxconn. We have largely departed from the practice of securing most of them.
India accounts for only a fraction of iPhone production, but the increase in exports bodes well for Prime Minister Narendra Modi’s plans to make the country an alternative to China as the world’s factory.
China’s zero-coronavirus policy and an episode of riots at the Zhengzhou factory, dubbed iPhone City as the world’s largest device production center, have revealed the dangers of relying on the state.
Beijing has since abandoned its approach to containing the virus, but Apple and other global companies are more than ever looking for alternative locations.
India’s vast workforce, Prime Minister Modi’s backing and a thriving local market make India a prime candidate to take on more electronics manufacturing.
Foxconn, Apple’s largest supplier, began building facilities in the country more than five years ago in anticipation of the need to expand its geographic reach.
One of the recent selling points is the plethora of new government incentives that underlie Modi’s drive to make India an electronics manufacturing hub.
Foxconn earned $44 million in profits in the first year of its so-called production-related incentive scheme, while Wistron’s claims are currently being processed.
Representatives from Apple, Foxconn and Wistron didn’t respond to emails seeking comment. A spokeswoman for Pegatron declined to comment.
Apple’s contract manufacturers are now manufacturing iPhones in factories in southern India.
However, domestic production has only just begun.
Bloomberg Intelligence estimates that about 3 million devices will be manufactured in India in 2021, compared to 230 million in China.
Foxconn began manufacturing the iPhone 14 in India a few months ago – earlier than expected – with a surprisingly smooth production rollout, reducing the time lag between production in China and India from months to just weeks. Apple’s three Taiwanese partners are now assembling iPhones 11 to 14 in India.
But moving out of China, where Apple has built a deep supply chain for nearly two decades, will not be easy.
An analysis by Bloomberg Intelligence estimates that it would take about eight years to move just 10% of Apple’s manufacturing capacity out of China.
India tracks the production and exports of all smartphone makers enjoying financial incentives as part of the Modi promotion.
Beyond smartphones, the country is also formulating plans to increase financial incentives for tablet and laptop makers, encouraging Apple to make everything from earbuds to MacBooks domestically, attracting other brands. I hope
The iPhone maker also plans to open its first retail stores in India in 2023 after meeting certain standards imposed on foreign retailers.
