Apple is planning to shift some iPad production out of China and intends to assemble the tablets in India. citing sources close to the Indian government, CNBC reports that the company is currently in talks with government officials on the matter, but it has not been finalized. The move is not surprising, as Apple has been slowly shifting production of Macs, iPads and iPhones to other countries like India and Vietnam over the past few years due to supply challenges and geopolitical factors.
A few days ago, the Wall Street Journal also reported that Apple has “accelerated plans to move some of its production outside of China,” with India and Vietnam being the main targets. The key goal is to reduce dependence on Foxconn, Apple’s main assembly partner, which still has a firm grip on the Chinese market. A recent series of incidents at Foxconn’s largest manufacturing plant in China that severely disrupted production, as well as tense geopolitical relations, have been cited as key reasons for Apple to diversify its production to other markets such as India.
However, this isn’t the first time we’ve heard about plans to move iPad production outside of China. Reuters reported in November 2020 that Apple had asked its major suppliers to move a small portion of iPad and MacBook production outside of China, with Foxconn reportedly committing to invest $270 million in a production facility in Vietnam. in January 2021, Nikkei Asia reported that Apple was moving most of its iPad production to Vietnam.
Apple began assembling iPhones in India in 2017, with the iPhone SE being its first product. 2020 saw Apple begin production of the iPhone 11 in India, marking the first time Apple’s high-end smartphones have come off the assembly line in India. 2022 saw another milestone achieved with the iPhone 14, the first time Apple has launched a new iPhone in the In 2022, iPhone 14 achieves another milestone, the first time Apple has started production in India in the same calendar year as the launch of a new iPhone.
In addition to manufacturing the next-generation iPhone in India through Foxconn, Apple is also diversifying its portfolio of contract manufacturers in India by shifting some orders to PEGATRON, Bloomberg reported. Foxconn, meanwhile, has quadrupled its workforce in India to cope with a shortage of iPhone supply. According to Reuters, JPMorgan estimates that Apple will shift nearly 25 percent of its iPhone production to India by 2025. As for the iPad and Apple Watch, Vietnam is expected to bag 20 percent of net production. The company is also considering Malaysia and the United States as possible production sites.
Apple is reportedly wary of supply disruptions caused by China’s COVID-19-related challenges, which have derailed market supply of the iPhone 14 Pro. However, China will continue to be a major player in Apple’s design and manufacturing operations. Cheap labor, coupled with the availability of talent and established channels for converting product blueprints into assembly plans, make China the only place where manufacturing will continue to be concentrated for the foreseeable future.
