Apple Supply Chain Reshaping: India Factory Mass Produces New iPhones, China Remains Core

Apple Supply Chain Reshaping: India Factory Mass Produces New iPhones, China Remains CoreBloomberg (August 29) - Apple's supply chain ecosystem has witnessed a significant shift: Indian factories have commenced mass production of the new iPhones to be released in early September. Sources reveal that the Indian assembly lines are not only assembling the entry-level iPhone 16 but also handling a portion of the Pro model orders

Apple Supply Chain Reshaping: India Factory Mass Produces New iPhones, China Remains Core

Bloomberg (August 29) - Apple's supply chain ecosystem has witnessed a significant shift: Indian factories have commenced mass production of the new iPhones to be released in early September. Sources reveal that the Indian assembly lines are not only assembling the entry-level iPhone 16 but also handling a portion of the Pro model orders. This development marks a notable transformation in Apple's supply chain, as previously, the latest and high-end iPhones were exclusively manufactured in China.

Core of the Industry Chain Remains in China

Despite Indian factories assembling 30 million iPhones in the past year, including 18 million in the first half of this year, supplying both the domestic Indian market and overseas markets like the US, analysts point out that the limitations of Indian manufacturing restrict its role to providing supply chain diversification for major consumer electronics brands like Apple, helping them tap into the Indian market.

Ivan Lam, an analyst at Counterpoint Research, says that in the coming years, the growth of the Indian supply chain will primarily be limited to the assembly of final products. The production of more valuable electronic and mechanical components will continue to be concentrated in China. India's efficiency, infrastructure, and talent pool are yet to match China's.

Challenges and Controversies of "India's Apple Chain"

Apple's efforts to foster the "Apple chain" in India have not been smooth sailing. Longer learning curves, slow entry of component and parts suppliers into the Indian market, and other factors have hindered the expansion of the supply chain. Furthermore, Apple suppliers face stringent scrutiny from the Indian government when importing equipment and talent to India.

A supply chain executive revealed that, during the period of new product launches, Apple prioritizes supply chain stability. Most of the Pro series iPhone orders are still allocated for production in China to ensure smooth supply chain operations ahead of the US "Black Friday" shopping spree in November.

Negative News Continues

In June, British media reported that Foxconn, which has a factory in India, "systematically excluded married women during recruitment" due to their perceived greater family responsibilities. Apple and Foxconn acknowledged past errors in recruitment practices but stressed that they have taken corrective measures against the misconduct of recruitment agencies.

Recently, rumors of "low yield rates" at the Indian factory have been circulating. Foxconn Chairman Liu Yangwei was forced to publicly respond, stating that "many of the things circulating outside are not true." He stated that if the yield rate at the Indian factory was only 50%, "I would have already pulled out." However, he only provided a general description and did not give specific figures.

Summary

The commencement of mass production of new iPhones by Indian factories signifies a major shift in Apple's supply chain, but China remains the core. The limitations of Indian manufacturing, the challenges in supply chain expansion, and the continuing negative news demonstrate that India's "Apple chain" faces numerous hurdles in its future development.