India’s push to establish itself as a promising alternative to China as a global manufacturing hub and Apple‘s need to deep penetrate the Indian market will eventually make customers emerge as the ultimate winners.
Barely two months after the initial release of iPhone 14 which is being manufactured in China, Apple is aiming to kick off the manufacturing of the iPhone 14 in India. This will undoubtedly narrow the gap between India and China, albeit not close it completely as some thought. The move will definitely give another jolt to China’s dominance in the global manufacturing sector.
Made in India iPhone 14: What’s Apple Up To?
According to Bloomberg’s sources, Apple has been working closely with suppliers to increase manufacturing in India and reduce the time it takes to produce the new iPhone. This is in contrast to the six to nine months that were required by manufacturers for previous iPhone launches. Apple, which has been manufacturing its iPhones mainly in China for many years, is looking for alternatives due to the increasing discomfort between the US government and China’s Xi Jinping administration. The lockdown imposed by the Chinese administration throughout the country is another reason for Apple to look beyond China as it has disrupted economic activity.
Analysts like Ming-Chi Kuo from TF International Securities Group believe Apple will ship its next iPhone almost simultaneously from both countries. This would be a significant milestone in Apple’s long-term strategy to reduce the dependence on one country by diversifying its supply chain, and create redundancy.
Foxconn Technology Group is the primary manufacturer of iPhones for years. It studied the shipping process from China and assembled the iPhone 14 at its plant in Chennai, south India. However, the biggest challenge for the company is to maintain Apple’s highest standards of confidentiality in India.
Despite leaving no stone unturned, Apple and Foxconn eventually realised that simultaneous launches in India and China will be an unrealistic goal to achieve, at least this year. However, it is still a long-term goal. The first made in India iPhone 14 will be completed by late October or November following the global launch scheduled for early September 2022.
However, Apple is aiming to make the most of the festive season in India and targeting Diwali, which falls on October 24, to kick off the festive season with a bang.
It would be a significant milestone achievement for India once it matches China’s iPhone production pace. India has been promoting itself as a promising alternative at a time when China is struggling with rolling Covid lockdowns and US sanctions which have forced many companies to explore new manufacturing hubs beyond China. Apple’s strict quality control measures and strict deadlines mean that iPhone assembly often requires a great degree of coordination among hundreds of suppliers.
Apple’s Relationship With China
Although some people at Apple and Foxconn had been hoping to start simultaneous production of iPhone in India as well as China this fiscal year itself. However, that wasn’t aligned with the goals set by the company. Given the strategic contribution of China to Apple’s revenue and iPhone sales, the Cupertino giant wanted to concentrate on China first, then work on India production to ensure a smooth launch.
China accounts for a lion’s share of Apple’s yearly revenue and the iPhone is the top smartphone brand in China. In conditions, Apple couldn’t afford to jeopardise its dominant position in China for India.
Apple’s Indian partners started manufacturing iPhones in India in 2017 as the beginning of a long-running effort to increase India’s manufacturing capabilities. India, a country with a population of 1.4 billion, has become an attractive consumer market for almost every global brand. However, to boost employment the country’s prime minister Mr. Modi launched Make in India program that offers financial incentives to global brands to encourage production locally.
The scenario with Apple is a bit tricky though. Secretiveness is a major problem causing limitations in India’s production. Apple leaves no stone unturned to protect product information in China, and maintaining similar strict controls would be difficult in another country.
According to the sources of Bloomberg, Indian executives are deployed for securing a section of Foxconn’s assembly lines. They also sequestered workers and examined all ways the security could be compromised. However, they are finding it difficult to replicate China facility’s strict seclusion and extreme security measures in India.
Apple is also concerned about Indian customs officials. They often open packages to verify that imported materials match their declarations. This could be another vulnerability for product secrecy.
Even if Apple or Foxconn wanted a simultaneous launch of the iPhone, supply-chain problems would have prevented it from happening. China, which is the main source of many iPhone components has been through several waves of lockdowns that have complicated the shipping of components through the country.
On the other hand, India’s factories and workforce have not been able to follow the strict guidelines that Apple demands from suppliers. Apple began manufacturing iPhones in India five years ago through contract manufacturers Foxconn Corp. and Wistron. During this period two notable incidents related to workers’ revolt over wages and food quality have taken place.