Apple Suppliers Plan Major Production Move to India

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An unspecified Apple supplier is planning to move a significant amount of production operations to India, according to The Times of India.



The unnamed Apple contract manufacturer is expected to shift six production lines in total, with the aim of accommodating the export of $5 billion worth of devices from India. Establishment of a new facility for these new Indian production lines is expected to generate employment for around 55,000 workers over the period of a year. It will begin manufacturing iPhones, but may expand to other devices in the coming years.

Apple suppliers Wistron, Pegatron, Foxconn, and Samsung, are all expected to set up production facilities in India. These vendors are expected to be joined by Indian vendors Dixon Lava and Micromax in supplying Apple.

Foxconn announced last month that it was planning to invest as much as $1 billion in India, and has already established its first manufacturing plant in India. Last month, Apple started making iPhone 11 at the Foxconn plant in India. This was the first time a top-of-the-line model was been manufactured in the country.

Many companies are planning to diversify their supply chains in an effort to reduce dependence on China, which has come under increased scrutiny amid the global health crisis and trade war with the United States.

The Indian government has motivated production with the "production-linked incentive" (PLI) scheme, designed to attract companies with large-scale requirements for electronic components and semiconductors. The government has pledged up to six percent of costs of locally produced goods over the next five years. 22 companies from various countries, including Taiwan, South Korea, and Germany, have already applied to the PLI scheme. There have been no applications from Chinese companies. The scheme has already exceeded the government's manufacturing revenue target.

India is the second-largest smartphone market, but Apple has generally struggled to establish a substantial foothold in the country in the past. Apple almost entirely sells China-made devices‌ in India, but increasing local production would take advantage of the government's "Made in India" initiative, which could see Apple save as much as 22 percent on import duties and give it the option to reduce prices. Should Apple's supply chain expansion into India be successful, it may begin using the country as an "export hub."

Article Link: Apple Suppliers Plan Major Production Move to India
 

mannyvel

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Mar 16, 2019
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Supply chain diversification at it's best. You don't want to be in China if/when they invade Taiwan.

China's been inward focused for so long that the Chinese media believe that the South China Sea takeover and the Hong Kong takeover are "defensive." They'll probably believe the same when they invade Taiwan. "We were forced to do it."
 

magicschoolbus

macrumors 68000
May 27, 2014
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Great move by Apple, let's home it comes true.

China invading Taiwan is imminent, and you can bet they are eying TSMC.. the Chinese government will take full control of that company and use it to their advantage after the invasion is complete.
 
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DotCom2

macrumors 601
Feb 22, 2009
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India is a tough market, they require the product to be made in India. If only the USA took the same stance so we were’t importing phones always from other countries. I don’t think this is directed towards making phones in India to sell to the USA at all.
Doesn't the article state that the iPhone 11 was made in India? Or am I not understanding what you mean?
 

Bustycat

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Jan 21, 2015
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Great move by Apple, let's home it comes true.

China invading Taiwan is imminent, and you can bet they are eying TSMC.. the Chinese government will take full control of that company and use it to their advantage after the invasion is complete.
Meanwhile Apple kept reminding how they love China so much in every single keynote recently.
 
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Realityck

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Nov 9, 2015
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Doesn't the article state that the iPhone 11 was made in India? Or am I not understanding what you mean?
The manufacturing is directed for selling to India, not necessarily export from India. Look at the last couple of years of Oppo phones news related to selling phones in India. This is a another huge market that Apple wants take on.
 

drzen

macrumors regular
Aug 8, 2017
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The manufacturing is directed for selling to India, not necessarily export from India. Look at the last couple of years of Oppo phones news related to selling phones in India. This is a another huge market that Apple wants take on.
Only to begin with. Apple however is incredibly far-sighted, and China will implode over the course of the coming decades, by which time Apple will have a global manufacturing hub in India for export, not only for the domestic Indian market. They were test driving the QC over the past few years by assembling the cheaper old models in the Indian plant, and are now ready for large scale commercial production of current model iPhones.
 

ghanwani

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Dec 8, 2008
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This is one of the reasons I think Apple will be a $10T company within the next 3 years. They will be able to tap into the Indian market in a much bigger way than before.

(The other huge reason being monetary policy.)
 
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ArPe

macrumors regular
May 31, 2020
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Man this is finally going to make a big difference. India is very patriotic about buying goods made in the country and if Apple Silicon and reduced duties lowers prices sales will be greatly improved.

I hope nobody underestimates the move to Apple Silicon. The top MacBook Pros will have all day battery life, no noticeable heat or fan noise, no throttling and when the charts come out showing their performance compared to an x86 laptop we are going to see a lot of enthusiasm.

It’s going to be like back when the G3/4/5 was compared to the Pentium, but this will be on a whole new level of efficiency never seen before.
 

coldwaves

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May 30, 2011
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India has high tariff for cell phone import. As a result, cell phone makers move production lines there to produce for sales in India. When they now use these production lines not only for sales in India but also for export to global market, it is not hard to imagine retaliatory tariff from other countries, particularly those that have interest in manufacture.
 
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Northern Man

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Aug 25, 2013
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This is one of the reasons I think Apple will be a $10T company within the next 3 years. They will be able to tap into the Indian market in a much bigger way than before.
Well, they will have to lower their selling prices by a very large % to increase their sales in India in any meaningful way.
 

IIGS User

macrumors 6502
Feb 24, 2019
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Smart, smart, and smart.

Gotta start somewhere. Once the suppliers and manufacturing is in place for "flagship" devices it's scalable.

Diversifying out of China, even if it takes a decade, is a forward thinking business model.

Apple will placate China for now. Apple still needs China like you needed that room mate in college you hated but needed to make the rent. Once the semester was over, you got out of there real quick and didn't look back.

Apple will toss China away like a rusty pool noodle when they can make way without them. For now, China is just that room mate who still helps with the rent.
 

mannyvel

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Mar 16, 2019
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Well, they will have to lower their selling prices by a very large % to increase their sales in India in any meaningful way.
Apple's been aware of this for a few years now. They're moving to India because most of the other markets have become saturated. With a middle class of 300 million, it's worth it because this market is essentially greenfield. If Apple can figure out a good distribution and financing model then their growth in India should accelerate. Of course, given the current worldwide situation that may not work out so well, but still.

Anyway, it makes strategic sense to diversify the supply chain. Nothing like an existential threat to your business to jumpstart the process.
 

ArPe

macrumors regular
May 31, 2020
227
544
Apple's been aware of this for a few years now. They're moving to India because most of the other markets have become saturated. With a middle class of 300 million, it's worth it because this market is essentially greenfield. If Apple can figure out a good distribution and financing model then their growth in India should accelerate. Of course, given the current worldwide situation that may not work out so well, but still.

Anyway, it makes strategic sense to diversify the supply chain. Nothing like an existential threat to your business to jumpstart the process.
Also if you tried to use a laptop, just about any laptop ever, in South Asia or the Middle East, it’s really hard to keep the laptop cool. The machines easily get hot and fans blowing hard all the time. Once they experience a machine with Apple Silicon they will never want to use an x86 laptop again.
 

mannyvel

macrumors 6502a
Mar 16, 2019
534
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Hillsboro, OR
You all haven’t kept up with the news since 1948 have you .... put India , Kashmir , Muslims , caste in your google machine.
Democracy doesn't guarantee an outcome. It only means that a large segment of the population participates, meaning that the government can make an argument that there is more legitimacy for its decisions.
 

Realityck

macrumors 6502a
Nov 9, 2015
681
602
Silicon Valley, CA
India has high tariff for cell phone import. As a result, cell phone makers move production lines there to produce for sales in India. When they now use these production lines not only for sales in India but also for export to global market, it is not hard to imagine retaliatory tariff from other countries, particularly those that have interest in manufacture.
Exactly. When Oppo part of BBK, a Apple competitor wanted to sell phones in India they found out quickly that its very hard to set up a network of resellers for their products made in China because of the tariffs, and Indian loyalty to their own products. So they went ahead with setting up Indian factories for production. But India is such a large marketplace I don't think most here fantom that pretty much all that will be made in India will ultimately be sold there. Its like China is that bad guy and we need to diversify so we import less from China and more from India. But India is not as nice a society as some think it is with its 1.32 billion people. As posted by ahmadof look at the news from there. ;)
 
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