Report Examines Challenges Apple Has Faced in Expanding Manufacturing in India

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The Information has published a detailed look into the challenges that Apple has faced in expanding its manufacturing operations in India, including strict labor laws, unsatisfactory health and safety standards, and protectionist trade policies that have resulted in rising tariffs on smartphone components.


An excerpt from the paywalled report:
For example, one Indian supplier Apple approached in 2018 was Superpacks, which operated a packaging factory in Bangalore. Apple sent auditors to assess whether its supplier responsibility practices were up to Apple's standards. The audits revealed dozens of violations. The site had no safety measures for storing chemicals, lacked monitoring for noise and wastewater, and didn't have several environmental and construction permits. It didn't properly test drinking water for workers and the site lacked a fire hydrant system, according to a person close to Apple.

Apple spent months pushing Superpacks to fix the violations. However, the Indian company stopped giving updates and missed deadlines for fixes. Apple ultimately didn't give it a business contract. Superpacks didn't respond to a request for comment.
Apple has reached agreements with some suppliers in India, such as Wistron, which assembles the iPhone 7 in the country. However, the majority of Apple's manufacturing remains in China, with recent issues such as the U.S.-China trade war and the COVID-19 coronavirus outbreak emphasizing the need for diversification.

As the report notes, India recently relaxed rules on local sourcing of components, paving the way for Apple to open an online store in India later this year and its first retail store in the country by next year.

Full Article: Inside Apple's Search for an Indian Supply Chain by The Information

Article Link: Report Examines Challenges Apple Has Faced in Expanding Manufacturing in India
 

julesme

macrumors 6502
Oct 14, 2016
257
708
San Jose
Hmmm...I’m at a loss here, driving myself crazy trying to find a single country that tests its drinking water and knows how to deploy fire hydrants. Where on earth could such a place exist???!

This is a real head scratcher!

- Tim Apple
A real American Patriot

/s
 

Cosmosent

macrumors 65816
Apr 20, 2016
1,186
1,261
La Jolla, CA
Its always puzzled me why Apple has never setup its own iPhone assembly factory somewhere here in the States.

They certainly have the Coin to create a "seasonal" campus somewhere here !

Everyone knows Cook's Apple sucks at Innovation.

His specialty was supposed to be Manufacturing Operations Efficiency !

He appears to have failed BIG time here (as well), by putting ALL of Apple's Eggs into one Basket (China !) !
 

Will do good

macrumors 6502a
Mar 24, 2010
628
309
Earth
Its always puzzled me why Apple has never setup its own iPhone assembly factory somewhere here in the States.

They certainly have the Coin to create a "seasonal" campus somewhere here !

Everyone knows Cook's Apple sucks at Innovation.

His specialty was supposed to be Manufacturing Operations Efficiency !

He appears to have failed BIG time here (as well), by putting ALL of Apple's Eggs into one Basket (China !) !
I don't know? could it be cost as well as where will you find couple of hundreds thousand people on a short notice? But you are right, you and most people on this board can fix any world problem, wish they would just ask.
 

Northern Man

macrumors 65816
Aug 25, 2013
1,466
2,200
Hmmm...I’m at a loss here, driving myself crazy trying to find a single country that tests its drinking water and knows how to deploy fire hydrants. Where on earth could such a place exist???!

This is a real head scratcher!

- Tim Apple
A real American Patriot

/s
Flint, Michigan may not pass your criteria 😏
 
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justperry

macrumors G4
Aug 10, 2007
10,635
6,124
I'm a rolling stone.
Snip...
He appears to have failed BIG time here (as well), by putting ALL of Apple's Eggs into one Basket (China !) !/snip
The whole world did, see what happens/ed, economies are "failing" now because of corona.

One word comes to my mind BIG, like in big companies...big countries
Apple
Google
Facebook
Amazone
China
EU
...
The bigger they get the harder they fall/fail, there will be a time when all mergers are looked upon.
We haven't learned anything from 2008.
What's wrong with making enough money to get by, no, more..more..MORE is better.Not
 

JPack

macrumors 603
Mar 27, 2017
5,680
8,628
It's all about the infrastructure and education.

Not to mention the cultural differences. To this day, the U.S. Department of State tells women not to travel alone in India due to sexual assaults. When half of your population's workforce is scared, it won't be productive. Forget about safety violations related to chemicals or drinking water.

After WWII, both China and India were in relatively the same position. Yet today, India's GDP is about 1/4 that of China. The difference is, one country spent a lot on infrastructure, education, and other reforms.
 
Last edited:

kemal

macrumors 68000
Dec 21, 2001
1,629
1,782
Nebraska
At least Apple didn't just roll with it. Time to bring the level up world wide and stop being such a clockwork orange.
 

Mousse

macrumors 68020
Apr 7, 2008
2,154
3,446
Flea Bottom, King's Landing
Its always puzzled me why Apple has never setup its own iPhone assembly factory somewhere here in the States.

They certainly have the Coin to create a "seasonal" campus somewhere here !

Everyone knows Cook's Apple sucks at Innovation.

His specialty was supposed to be Manufacturing Operations Efficiency !

He appears to have failed BIG time here (as well), by putting ALL of Apple's Eggs into one Basket (China !) !
The reason is in the article. In the first sentence even...
The Information has published a detailed look into the challenges that Apple has faced in expanding its manufacturing operations in India, including strict labor laws, unsatisfactory health and safety standards, and protectionist trade policies that have resulted in rising tariffs on smartphone components.
Timmy can't exploit prison labor, so no iPhones manufacturing in the US. Forget about it.
 

freakomac

macrumors regular
Nov 21, 2014
144
39
Chennai
Foxconn has a plant up and running producing the iPhone X and above series phones in Chennai, India for sometime now. Wistron is a small player making older models.
 

ScooterComputer

macrumors regular
Jul 28, 2011
168
127
Hmmm...I’m at a loss here, driving myself crazy trying to find a single country that tests its drinking water and knows how to deploy fire hydrants. Where on earth could such a place exist???!

This is a real head scratcher!

- Tim Apple
A real American Patriot

/s
Well, @julesme, you see if Apple manufactured in the USA, they'd not be able to take advantage of all those very high tech accounting schemes practices to avoid pay the taxes they owe, because they'd not be able to export and import and export and import and export and import through a dozen other countries helping out all those economies. ;)

For all the newcomers, Apple used to manufacture all their computers in the USA, in California (! believe it or not, in Fremont) and Colorado (Fountain). But yes, computers cost a LOT more back then. Then again, manufacturing was very different back then too, much more costly and labor intensive, not as automated. I am somewhat dubious of claims that Apple could not manufacture in the US today; I think that claim comes with a very big *, which is "at the very high profit margin they want". But when analysts like iSuppli/IHS put the labor cost for iPhones at around $2, you really have to wonder… the average hourly Chinese factory worker makes $3.60/hour (yes… really) so are we really saying Apple couldn't get Americans to buy iPhone for an extra $50 that used non-near-slave-labor?? They charge $100 to go from 32GB to 64GB, and that's like $4 of chip cost delta. I'd happily pay up for the 128GB model if I knew it was manufactured in the US. And I'm not anti-Chinese; I'm just pro-American laborer/economy. (Not to mention the logistics cost-benefit of shipping within a primary market vs putting inventory on a supertanker for an ocean voyage.)

The problem isn't really American capability, it is 100% due to business and accounting decisions and profiteering. Simple as that.
 

I7guy

macrumors Core
Nov 30, 2013
22,620
10,490
Gotta be in it to win it
Its always puzzled me why Apple has never setup its own iPhone assembly factory somewhere here in the States.
Because of “carbon credits”?
They certainly have the Coin to create a "seasonal" campus somewhere here !

Everyone knows Cook's Apple sucks at Innovation.

His specialty was supposed to be Manufacturing Operations Efficiency !

He appears to have failed BIG time here (as well), by putting ALL of Apple's Eggs into one Basket (China !) !
Appearing to fail and actually failing are different. If Tim fails the board will throw him out.
- - Post merged: - -

....The problem isn't really American capability, it is 100% due to business and accounting decisions and profiteering. Simple as that.
The problem is partly the government as well.
 
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H2SO4

macrumors 601
Nov 4, 2008
4,582
4,805
Well, @julesme, you see if Apple manufactured in the USA, they'd not be able to take advantage of all those very high tech accounting schemes practices to avoid pay the taxes they owe, because they'd not be able to export and import and export and import and export and import through a dozen other countries helping out all those economies. ;)

For all the newcomers, Apple used to manufacture all their computers in the USA, in California (! believe it or not, in Fremont) and Colorado (Fountain). But yes, computers cost a LOT more back then. Then again, manufacturing was very different back then too, much more costly and labor intensive, not as automated. I am somewhat dubious of claims that Apple could not manufacture in the US today; I think that claim comes with a very big *, which is "at the very high profit margin they want". But when analysts like iSuppli/IHS put the labor cost for iPhones at around $2, you really have to wonder… the average hourly Chinese factory worker makes $3.60/hour (yes… really) so are we really saying Apple couldn't get Americans to buy iPhone for an extra $50 that used non-near-slave-labor?? They charge $100 to go from 32GB to 64GB, and that's like $4 of chip cost delta. I'd happily pay up for the 128GB model if I knew it was manufactured in the US. And I'm not anti-Chinese; I'm just pro-American laborer/economy. (Not to mention the logistics cost-benefit of shipping within a primary market vs putting inventory on a supertanker for an ocean voyage.)

The problem isn't really American capability, it is 100% due to business and accounting decisions and profiteering. Simple as that.
This guy gets it. Everybody wants high margin, that’s understandable.
But at what cost?
There are lots of companies that manufacture in their home country and they make do with low margin.
The real innovation at Apple today is keeping costs low and avoiding taxes.
 

m4mario

macrumors regular
May 10, 2017
218
517
San Francisco Bay Area
Hmmm...I’m at a loss here, driving myself crazy trying to find a single country that tests its drinking water and knows how to deploy fire hydrants. Where on earth could such a place exist???!

This is a real head scratcher!

- Tim Apple
A real American Patriot

/s
LOL. If you want to manufacture in America, you would need to issue new H1B visas as there is no skilled, willing labor available to do such jobs.
I am still searching for the American who wants and trains their kids to work in an assembly plant. There are countries where it is the parent's dream that their child could work in an environment with American safety standards.
Americans who want manufacturing to happen in America are not willing to work in a manufacturing plant. That is the real head scratcher.

Do you think there are enough Americans who can do this?


Do schools here train for something like this? At least are there enough Americans who want to do this for a living and are willing to train for this?

Please understand that manufacturing is a super low income, super hard job. America can and does provide better opportunities. That is why no one here is willing to work in an assembly line. And that is a good thing. Don't let politicians fool you otherwise.
 

nylon

macrumors 65816
Oct 26, 2004
1,201
572
It's all about the infrastructure and education.

Not to mention the cultural differences. To this day, the U.S. Department of State tells women not to travel alone in India due to sexual assaults. When half of your population's workforce is scared, it won't be productive. Forget about safety violations related to chemicals or drinking water.

After WWII, both China and India were in relatively the same position. Yet today, India's GDP is about 1/4 that of China. The difference is, one country spent a lot on infrastructure, education, and other reforms.
That's some nice propaganda there. You forgot to mention that China opened up its economy 2 decades prior to India. Not to mention its a Democracy vis a vis a totalitarian dictatorship that builds concentration camps in the 21st century.
 
Last edited:

szw-mapple fan

macrumors 68000
Jul 28, 2012
1,813
1,374
But when analysts like iSuppli/IHS put the labor cost for iPhones at around $2, you really have to wonder… the average hourly Chinese factory worker makes $3.60/hour (yes… really) so are we really saying Apple couldn't get Americans to buy iPhone for an extra $50 that used non-near-slave-labor??
$3.6/hour is not very low for this kind of work in China. With longer work weeks than the U.S. It will come down to about 2,000 to 3,000 yuan per month. It not high by any means but it’s a very livable wage considering hourly restaurant servers tend to earn about $1.5/hour. Not to mention the factory often provides room and board. The cost of living is simply cheaper in most places in China and India.
 

FriednTested

macrumors 6502
Jan 13, 2014
387
73
Maybe Apple didn't offer enough money. Why else shouldn't Superpacks fix those violations?
Because it’s India. That’s how things are done. Even if Apple paid double of what they do the violations would still not have been fixed.
- - Post merged: - -

Well, @julesme, you see if Apple manufactured in the USA, they'd not be able to take advantage of all those very high tech accounting schemes practices to avoid pay the taxes they owe, because they'd not be able to export and import and export and import and export and import through a dozen other countries helping out all those economies. ;)

For all the newcomers, Apple used to manufacture all their computers in the USA, in California (! believe it or not, in Fremont) and Colorado (Fountain). But yes, computers cost a LOT more back then. Then again, manufacturing was very different back then too, much more costly and labor intensive, not as automated. I am somewhat dubious of claims that Apple could not manufacture in the US today; I think that claim comes with a very big *, which is "at the very high profit margin they want". But when analysts like iSuppli/IHS put the labor cost for iPhones at around $2, you really have to wonder… the average hourly Chinese factory worker makes $3.60/hour (yes… really) so are we really saying Apple couldn't get Americans to buy iPhone for an extra $50 that used non-near-slave-labor?? They charge $100 to go from 32GB to 64GB, and that's like $4 of chip cost delta. I'd happily pay up for the 128GB model if I knew it was manufactured in the US. And I'm not anti-Chinese; I'm just pro-American laborer/economy. (Not to mention the logistics cost-benefit of shipping within a primary market vs putting inventory on a supertanker for an ocean voyage.)

The problem isn't really American capability, it is 100% due to business and accounting decisions and profiteering. Simple as that.
$3.60 per hour would be middle/upper middle class in India. That too in an expensive city like Bombay. The average semi skilled labourer in my factory was $1.5 an hour.
 
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