Apple Pivots India as iPhone Production base iPads and Macbooks to Continue in China

Apple CEO Tim Cook, who has built China as Apple's primary manufacturing base, is making efforts to reduce its reliance on China, with India being one of the major production hubs primarily for iPhones for the foreseeable future.

Bloomberg, citing people with knowledge of Apple's plan, reported that Apple is diversifying away from China slowly so as not to provoke China's retaliation and is trying to build India as the production location for iPhones and accessories, Vietnam for production of AirPods and Mac assembly, Malaysia for some Mac production, and Ireland for some simpler products. Apple also intends to decrease its reliance on chips that are made in Taiwan, which is more challenging than device-making.

According to the report, Apple has assembled hundreds of employees to form the so-called "tiger teams" to tackle the weaknesses in its supply chain, with the teams setting up shop in suppliers' factories across countries to assess facility maintenance schedules and find backup suppliers for every component.

Despite India's efforts to attract suppliers for MacBooks and iPads, sources told Business Today that manufacturing PCs and tablets in India is not on Apple's roadmap for the next two to three years. They added that Apple is currently not making the Pro models of iPhones in India, and if Apple is really looking to expand its manufacturing base in India, it will first make the Pro model, instead of making a completely different product, such as MacBooks and iPads.

Still, Apple is aggressively expanding the production of iPhones, the product that accounts for about half of Apple's sales, in India. According to Bloomberg, Apple made 6.5 million out of the 200 million iPhones in India in 2022 and plans to increase its iPhone production in India for 2023 to 10 million, potentially reaching more than 15 million units in 2024.

Although India is Asia's second-largest PC market, the demand for PCs and tablets is not making a strong case for Apple to move its suppliers to the South Asian country, Business Today reports. However, it is noteworthy that Apple was the major brand in India that saw its shipments of PCs and tablets grow by more than 60% in 2022, according to Canalys' market tracker.

Apple suppliers production base
Manufacturing facilities	FY15	FY16	FY17	FY18	FY20	FY21
China	336	346	355	380	259	262
Japan	131	126	137	128	96	101
US	73	78	57	65	49	74
Taiwan	37	41	54	55	37	73
South Korea	34	29	35	41	30	42
Vietnam	14	18	20	18	23	27
Singapore	13	12	13	11	14	24
Malaysia	23	23	17	17	15	24
Thailand	17	19	16	16	19	22
Philippines	20	19	17	19	18	18
India	0	1	5	8	9	11
Others	63	66	50	49	40	55

Source: Apple's supplier list, compiled by DIGITIMES Asia, April 2023