FX.co ★ Apple Inc. betting on robust iPhone production and sales in India

Apple Inc. has been exhausted by fierce competition between the US and China. So, the iPhone manufacturer is now exploring manufacturing opportunities in India. Apple picked India as the country to implement the strategy of diversifying supply chains. In this way, the high-tech giant strives to diminish its reliance on China.

According to well-informed sources, at present, Apple produces as much as 14% of its marquee devices at facilities of its Indian partners, for example, Foxconn. This figure is double the amount produced in India last year. India’s Prime Minister said that Apple will be able to assemble up to 25% of all iPhones in the near future.

The corporation is shifting its focus towards India for a few reasons. For a start, Apple’s sales were badly hit by tough anti-COVID restrictions imposed by Beijing during the pandemic. This zero COVID tolerance derailed production at Foxconn’s facilities which account for the lion’s share of all iPhones produced. Manufacturing was crippled by lockdowns and protests of employees. As a result, deliveries of new iPhone 14 were on the brink of failure.

Second, Apple’s revenue is suffering due to simmering trade jitters and conflicts between the US and China. This in turn escalates the risks to Apple’s business in China. iPhone sales there have shrunk by almost 20% since the beginning of the year. For this reason, the high-tech giant decided to relocate its production outside China. Apart from India, the corporation has already founded alternative facilities in Vietnam, Thailand, and Indonesia.

Last but not least, Apple is betting on robust iPhone sales in India. The company is well aware that India’s expanding middle class boosts demand for premium gadgets. On the flip side, the booming Asian economy lacks a qualified workforce. Besides, Apple has encountered bureaucratic snags that are hard to settle. However, the US high-tech behemoth is not going to give up. The company is meeting the challenge with Chinese high-tech rivals. Earlier, Apple was engaged in talks with Open AI, which created popular ChatGPT, and Google. The talks were about incorporating AI into the iPhone.