The increased in production is said to suggest that Apple is accelerating efforts to cut its longstanding reliance on China as geopolitical tensions mount. The company’s longer-term shift away from China is reported to mark a gradual pivot from a years-long model that helped propel the iPhone to the industry’s forefront. It also coincides with a strategic rethink, as the company that revolutionized the smartphone sector searches for its next big hit.
More broadly, its growth in India encapsulates the country’s emergence as a manufacturing hub, where the likes of Tesla Inc, Cisco Systems Inc. and Alphabet Inc’s Google are keen to make hardware.
“A changing world has redrawn business priorities, with geopolitical risks, resilience against disruption and ESG requirements now setting the tone,” Bloomberg Intelligence analysts including Steven Tseng wrote in a February report tracking global technology supply chain shifts. “Ending near-exclusive dependence on China’s tech supply chain is costly and complicated, but the country’s diminished appeal demands a new approach.”
In 2023, Apple opened its first two company-owned stores in India, in New Delhi and Mumbai. The company plans to open three more stores in the country through 2027. “The tech supply chain’s diversification away from mainland China could become inexorable,” Tseng wrote.
Big win for PM Narendra Modi
The big jump in iPhone assembly in India marks a win for the Prime Minister Narendra Modi‘s government , which has wooed foreign companies including Apple with financial incentives to attract high-end manufacturing. The government says that the growth in manufacturing has created 150,000 direct jobs at Apple’s suppliers.
Foxconn Technology Group assembled nearly 67% and Pegatron Corp. about 17% of the India-made iPhones in the fiscal year ended March 2024, according to the Bloomberg report. The remaining iPhones were made in Wistron Corp.’s plant in southern Karnataka state, which the Tata Group took over last year. Tata Group plans to build one of the country’s biggest iPhone assembly plants.
Representatives for Apple declined to comment for the report.
For now, China remains Apple’s largest iPhone-making hub and biggest overseas market. However, it is also where Apple’s revenues are plunging, hit by rivals such as Huawei Technologies and an expanding ban on the use of foreign technology in the workplace.
Apple CEO Tim Cook has been careful to cultivate his relationship with Chinese Communist Party leaders, given the sensitivities of the company’s geographic diversification. He visited China last month to meet with the country’s commerce minister and open a new store in Shanghai.