Even Samsung, the biggest phone manufacturer in the world, is increasingly focusing more on India than China.
Media reported that Apple wants to increase the size of the iPhone assembly line. India has emerged as a possible replacement for the second biggest economy, given that China’s Zero Covid policy and the present geopolitical tensions have an impact on Apple’s supply chain there. two spheres.
China no longer appeals
Apple generated 5-7% of its total products in India, according to Piyush Goyal, India’s Minister of Trade and Industry. If I’m not incorrect, Apple wants to boost manufacturing at this location by up to 25%, he claimed.
In response to significant supply shortages in China, Foxconn, Apple’s main manufacturing partner, is planning to expand its operations in India.
According to Tarun Pathak, research director at Counterpoint, “it’s theoretically feasible, but it won’t happen tomorrow.”
The third period of 2022’s financial report from Apple revealed the company’s worst performance in the last five years. China is responsible for some of the cause. Concerns over the Covid-19 epidemic led workers to leave Foxconn’s largest iPhone manufacturing facility in October of last year.
The introduction of the compensation program infuriated Foxconn’s management, and a month later, violent demonstrations broke out. The iPhone 14 Pro and iPhone 14 Pro Max models were also hard to come by during important shopping seasons due to supply issues in the 1.4 billion-person nation.
Furthermore, the US-China relationship is becoming more and more tense. President Joe Biden’s administration barred Chinese corporations from acquiring sophisticated chip manufacturing machinery without a permit last year.
Apple will continue to rely heavily on China for a significant amount of its production, according to Professor Willy Shih at the Harvard Business School. The behemoth is attempting to diversify its supply chain, though. They will have other options if something goes wrong in China, Shih added.
POSSIBILITY FROM INDIA
“Our future focus is on the incredibly fascinating market of India. We have achieved double-digit year-over-year growth and quarterly sales records with our company in India “Tim Cook, the CEO of Apple, revealed this during the release of financial results earlier this month.
This year, India is expected to surpass China as the world’s most populous nation. Large factories are drawn to areas with a plentiful and inexpensive labor pool, which includes individuals who are technically proficient.
The low cost of labor, particularly individuals with technological skills, is what draws big firms.
The third-largest economy in Asia is a potential market as well. Despite worries about a worldwide recession, India is still expected to have the fastest-growing economy this year.
In order to entice investment in the industry of manufacturing mobile phones, the Indian government also implemented a number of measures. Pathak claims that China produces 70% of the world’s smartphones, with India producing 16% of them.
Some of Apple’s largest suppliers have invested more money in India so far. Foxconn announced a $500 million investment in its Indian affiliate last year. This week, the Karnataka state government in India also declared that it was “seriously exploring investment ideas” with Foxconn. This Taiwanese company has operated plants in Tamil Nadu and Andhra Pradesh.
Samsung is currently one step ahead of Apple, producing 20% of the world’s phones in India and another significant amount in Vietnam.
India is not an ideal nation.
However, there are several difficulties involved with producing phones in India. The World Bank (WB) estimates that this industry contributes barely 14% of the world’s second-most populated nation’s GDP. This figure continues to be increased by the Indian government.
“China has always built infrastructure when it has the opportunity. India still lacks that spirit “added Mr. Shih.
He was appreciative of China’s ongoing efforts to expedite the development of ports, roads, and other transportation channels that facilitate the free flow of commodities.
“Can India create a second Shenzhen in its own nation? Building these hotspots won’t be simple. India must consider a variety of factors, including logistics, infrastructure, and the availability of human resources “GS Pathak made a statement.
According to experts, if India draws major corporations like Apple, other manufacturers would be more interested in setting up shop there. For Prime Minister Narendra Modi, this will represent a significant national challenge.
