June 5, 2023

Great Indian Mutiny

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Apple has tripled iPhone production in India after the chaos in China

(Bloomberg) — Apple Inc . India tripled production of iPhones to reach $7 billion in the last financial year. This move helps reduce dependence on China.

The US company now makes nearly 7% of its iPhones in India through a wide range of partners from Foxconn Technology Group to Pegatron Corp., people familiar with the matter said. This is a significant leap for India, which is estimated to account for 1% of the world’s iPhones by 2021.

As tensions rise between Washington and Beijing, Apple is exploring ways to reduce its reliance on China. Its longtime partners, which make most of the world’s iPhones in sprawling factories in China, have added assembly lines at a rapid pace over the past year, said the people, who declined to be named because the information is not public.

The world’s most valuable company was embroiled in chaos at Foxconn’s main campus in Zhengzhou last year, causing disruptions to Apple’s supply chain and forcing it to cut production estimates. At the same time, Indian Prime Minister Narendra Modi has approved a series of incentives to encourage local manufacturing.

Of total production, Apple shipped $5 billion worth of iPhones in the year ending March 2023, nearly four times the previous period, the people said. Apple will try to build the next iPhones in India in the fall of 2023, just like in China. And if it continues to aggressively expand its suppliers, by 2025 Apple will assemble a quarter of all its iPhones in India. US officials declined to comment.

Even before the problems at the Chinese megafactory last year, Apple recognized the need to diversify its supply chain. It successfully lobbied for incentives in India and suppliers Foxconn, Wistron Corp. and forced Pegatron to scale internally. Together, the trio employs about 60,000 workers in India and manufactures models ranging from the older iPhone 11 to the latest iPhone 14 in the country.

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This helped put Apple at the center of India’s ambitions to become a major manufacturing hub and an alternative to China. Apple is one of the most demanding companies in the world when it comes to manufacturing: its production chain spans hundreds of companies worldwide and employs millions.

Original Note: Apple India iPhone Output Hits $7 Billion on China Shift (1)

–With contributions by Mark Gurman and Debbie Wu.

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