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Apple Reportedly Seeking to Move Significantly More Production From China to India

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In a bid to reduce its reliance on China as a base for operations, Apple could be planning to produce up to $40 billion worth of smartphones in India through contract manufacturers Wistron and Foxconn, reports The Indian Economic Times.

apple-india.jpg
Several meetings between Apple's senior executives and top ranking government officials over the last few months have paved the way for the iPhone maker examining the possibility of shifting nearly a fifth of its production capacity from China to India and scaling up its local manufacturing revenues, through its contract manufacturers, to around $40 billion over the next five years, say officials familiar with the matter.
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A senior government official told ET the decision is being linked to India's production-linked incentive (PLI) scheme, which was introduced to boost local manufacturing of electrical products, particularly smartphones.

A company must manufacture at least $10 billion worth of mobile phones in a phased manner between 2020 and 2025 to benefit from the PLI scheme and are required to meet target on a yearly basis.

Currently, Apple sells $1.5 billion of phones in India, but less than $0.5 billion of those are locally manufactured. In contrast, in 2018-2019 Apple produced $220 billion worth of products in China.

According to ET, government officials are willing to look into concerns that Apple hs with the PLI scheme, including how it values plant and machinery already in use in China, and the extent of the business information required under the scheme.

Note: Due to the political or social nature of the discussion regarding this topic, the discussion thread is located in our Political News forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Article Link: Apple Reportedly Seeking to Move Significantly More Production From China to India
 
Article Link
https://www.macrumors.com/2020/05/11/apple-moving-more-production-china-to-india/
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japanime said:
Deleted.

I decided not to get involved in this thread.
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Discretion os the better part of valor.

I'm just amazed. India seems to be a new hell hole that business has found to exploit the natives, and extract huge profits. It's sad... I bought Aleve, and it's 'made in India'. Why? Why would a drug company make something we take in our bodies in hell holes like India, China, and elsewhere. The drive of profit above all has to stop. It's ruining peoples lives.
 
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Abazigal said:
It’s almost as though there are many other factors that add to the final cost of the product, such as R&D.
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I know right? It's crazy to think that they can come up with the same phone with minor improvements year after year, then charge more than any competitor and then blame it on R&D. Do you know how long it takes to come up with new emojis all while keeping 64gb storage a standard option? CRAAAAZY!!!
 
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PinkyMacGodess said:
Discretion os the better part of valor.

I'm just amazed. India seems to be a new hell hole that business has found to exploit the natives, and extract huge profits. It's sad... I bought Aleve, and it's 'made in India'. Why? Why would a drug company make something we take in our bodies in hell holes like India, China, and elsewhere. The drive of profit above all has to stop. It's ruining peoples lives.
Click to expand...
Oddly missing from this logic, is clearly basic business sense, you have never owned a business have you?
You work for someone don’t you?
and you always have, so you don’t know any better, I get it...

Do you understand what China has done to the world recently?
 
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Okay.

If the phones built in India are going to be sold at majority to India and the immediate region, I have no problem with this.

BUT.

Seeing as our economy here in the United States will be suffering for quite some time after the shutdown, I would hope Apple could see through in creating some manufacturing opportunities here for phones that are going to be sold here.

Does that seem too far fetched an idea?
 
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Chips Stephens said:
Oddly missing from this logic, is clearly basic business sense, you have never owned a business have you?
You work for someone don’t you?
and you always have, so you don’t know any better, I get it...

Do you understand what China has done to the world recently?
Click to expand...

I ran a computer company for over 40 years. You want to lecture me on 'business'?

It's funny, I remember when 'business' meant helping your employees to have a better life. Employers cared about the people they employed. When a business announced massive layoffs, their stock took a hit. Back then, that meant the company was struggling, back then it meant that the end could be near. Then something changed. I remember watching CNBC, and major corporations announced massive job cuts, and their stock went up. Investors knew those jobs were going to China, or elsewhere, and the corporation would start reaping higher profits. The products didn't get better, the production of them got drastically cheaper. To go from a high labor cost to an almost literally zero labor cost is why these corporations were making huge profits, and the investor class lined up at the capital gains trough. My company used to sell to the residential market, and that ended. We sold to the business market and that ended too. Clients and customers went bankrupt because of the drive for profit.

Profit above all is evil. Profit above all is inhumane. Corporations were not started to enrich the investors, they were started to enrich the workers, and the areas they were located. Things changed, and not for the better. But, by all means, keep trying to lecture me on 'business'. This could prove humorous...
 
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repoman016 said:
I know right? It's crazy to think that they can come up with the same phone with minor improvements year after year, then charge more than any competitor and then blame it on R&D. Do you know how long it takes to come up with new emojis all while keeping 64gb storage a standard option? CRAAAAZY!!!
Click to expand...

I think one vastly underestimates the costs involved in making those “minor improvements” possible, especially if you want to do them right and do them properly, compared to a company like Samsung who tends to just introduce a new feature for the sake of marketing.

And of course, that’s not forgetting other factors such as the costs associated with designing Apple’s leading-edge A-series processors, updating the OS with new features every year, and bundling the free services like iMessage, FaceTime, Siri and Maps, all of which earn Apple no revenue on their own while representing a constant, recurring expense.

A product like the recent magic keyboard, and the corresponding tear down, shows just how complicated a product’s engineering has to be in order to enable an experience that might seem like “nothing” to the end user.

If anything, Apple has shown how long it takes for them to fully amortise the costs associated with manufacturing the iphone - 4 years. With the first SE coming out in 2016 (4 years after the first iphone 5) and the second SE coming out now (5 years after the iPhone 6).

One does not just look at the cost of the raw materials alone and presume that Apple is making a killing reselling the finished product at a multiple.
 
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clayj said:
Really wish they would move more of it back to America, even if it means prices have to go up.

And I really wish they'd move ALL of it out of China.
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Companies have been eyeballing nearby countries (e.g. India) to move manufacturing into from China for a while now. I think this is an economics decision and unrelated to COVID. These discussions began before the pandemic.

While I agree that at this point that you would be hard pressed to find an individual that does not want to retaliate against China for their crimes (not being as transparent about COVID from day 1 as they should have been is only the tip of the iceberg), bringing manufacturing back to the US is not a smart decision for many reasons. Whether you like it or not, the economy is global now, and is not going back to the way it was decades ago. By Apple not using the most economical form of manufacturing from a globalized perspective, they make themselves less competitive in the marketplace, which as an American company, actually would hurt the US economy at the end of the day. I'd strongly recommend you read up on economics and why isolationist economics hurts a country in the long-run.

All this said, government should play a role in ensuring wealth inequality doesn't happen. Unfortunately in the US, the federal government is more concerned about lining their own pockets with lobbyist money, than the welfare of their constituents. In a capitalistic model, businesses aren't going to always think people first, but rather profits first. Apple is just playing by the broken rules of the US federal government. If priority was put on jobs and income equality vs. stock prices, then you would see the general public benefit vs. the 1%, but that hasn't been the tone of the US economy for a while now.
 
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PinkyMacGodess said:
I ran a computer company for over 40 years. You want to lecture me on 'business'?

It's funny, I remember when 'business' meant helping your employees to have a better life. Employers cared about the people they employed. When a business announced massive layoffs, their stock took a hit. Back then, that meant the company was struggling, back then it meant that the end could be near. Then something changed. I remember watching CNBC, and major corporations announced massive job cuts, and their stock went up. Investors knew those jobs were going to China, or elsewhere, and the corporation would start reaping higher profits. The products didn't get better, the production of them got drastically cheaper. To go from a high labor cost to an almost literally zero labor cost is why these corporations were making huge profits, and the investor class lined up at the capital gains trough. My company used to sell to the residential market, and that ended. We sold to the business market and that ended too. Clients and customers went bankrupt because of the drive for profit.

Profit above all is evil. Profit above all is inhumane. Corporations were not started to enrich the investors, they were started to enrich the workers, and the areas they were located. Things changed, and not for the better. But, by all means, keep trying to lecture me on 'business'. This could prove humorous...
Click to expand...

The correlation between the health of the economy and stock price has been disconnected for a while now. This issue is bigger than Apple though. Everyone in America wants their "freedoms" and wants the government to stay out of the capitalistic economy, which is fine. But don't expect the economy to inherently put people before profits.
 
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EvilEvil said:
Apple scheming again to pay as little as possible for manufacturing while increasing prices.
Click to expand...
If that's your takeaway, you missed the point of the article. :rolleyes: Now, if the response read. It's a good thing that Apple is trying to reduce its' reliance on manufacturing in China. When and if, the manufacturing moves to India, they'll pay as little as possible, while the customers will be charge for the price of the move.

You might have been on to something.
 
Interesting. The Information reported in early March that Apple finds it difficult to manufacture iPhone components in India. Excerpt of summary below:
  • Small iPhone orders deter component suppliers from producing in India
  • Many Indian companies can’t meet Apple’s health and safety standards
  • Apple’s sales in India fell nearly 19% to $1.5 billion in the year leading up to March 2019
Apparently Apple could not even operate its own online store in India due to local content requirements. It will be quite an achievement if Apple can pull this off.
 
Most likely to avoid the Import tax (when apple sells iPhones in India)
and mostly likely lower end models will be manufactured in India such as iPhone SE, XR and soon to be iPhone 11 (once iPhone 12 is announced).
 
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