Apple Said to Make 20% of iPhone Production including iPhone 5 in India amid Pivot From China

BEIJING, August 4 (TiPost)— News about Apple’s further pivot from China circulated again. This time, the focus turns to the next generation of iPhone series.

Credit：Apple

Apple plans to move at least 20% of iPhone production to India as the Cupertino, Calif.-based company accelerates away from China, Nikkei News reported. The Japanese newspaper said Apple aims to manufacture 15 million iPhone units this year in India, including the upcoming iPhone 15 series, and the output more than doubles its target a year earlier. It added that Apple is investing heavily in manufacturing iPhone 15 series in the Southern Asian country.

Apple announced in April 2022 to start making iPhone 13 in India, which seems as one of signs to highlight increasing importance of countries like India, Vietnam and Mexico for suppliers who try to improve diversification of production away from China. Five months later, Apple confirmed it was assembling iPhone 14 in India, less than three weeks from its release of the new iPhone series. The confirmation effectively admitted India for the first time to make the latest flagship iPhone.  

If Apple’s plan, as Nikkei News reported, was accurate, the U.S. tech giant would further trim the gap between the new iPhone production in India and China to less than ten days.

Besides assembly, Apple was also said to plan creation of intermediate components like metal casings. In addition, the company wants to move some iPhone development resources from China to India, suggesting the potential development of new labs and the involvement of thousands of engineers.  

Increasing signs these years signaled the company is stepping up shift to India. Indian officials have showed their ambitious plan to attract more production of Apple’s products, especially its key offering iPhone. Apple is looking to scale up iPhone production in India and make 25% of the devices there, up from the current 5% to 7%, Piyush Goyal, the Commerce and Industry Minister, said in January. 

Apple seeks to make India a center to manufacture iPhones and accessories, Vietnam to assemble AirPods and Mac, Malaysia as a location for some Mac production, and Ireland to make a range of simpler products, according to tech reporter Mark Gurman. Apple employees have been instructed to focus on sourcing additional parts and local production lines beyond China for new offerings coming in 2024, but the company still plans to maintain existing operations in China, Gurman reported in April. Apple is carefully implementing the plan to move some of production out of China as its management concerned the rapid capacity transition could trigger the government’s retaliation as well as local consumers’ backlash, according to the report.

The value of India-made iPhones tripled to more than $7 billion in the fiscal year ended March, and most of it, about $5 billion, was exported, almost quadrupling export value in the previous year, Bloomberg reported in April. It was reported that Apple now makes nearly 7% of iPhones in India, up from just 1% in 2021. The report said Apple could work to unprecedentedly produce the next generation of iPhone series in India at the same time as in China, and it could assemble a quarter of all iPhones in India by 2025, if the aggressive expansion trend of its suppliers lasts. 

Apple just opened its first retail stores in India last month, when Apple Tim Cook first visited the country since 2016, then inaugurated the first store and met Indian Prime Minister Narendra Modi. The executive underscored commitment to growing and investing across the country, signaling an effort for refocus.

Cook singled India out after Apple posted its first third consecutive quarter of yearly decline in revenue since 2016. Cook said India is the second largest smartphone market in the world while Apple just has a very low and modest share there. “It’s a huge opportunity for us, and we’re putting all of our energies in making that occur,” he told analysts at an earnings conference Thursday.

India is likely to account for 15% of Apple’s revenue growth over the next five years, compared with 2% of revenue growth in the past five years, Morgan Stanley analysts estimated last month, citing Apple’s investments in production in the country and its economic boom. They forecasted India could create $40 billion in revenue for Apple over the next decade.

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