Thursday, March 23, 2023

Apple takes another key step to stop manufacturing the iPhone in China

Apple’s plan for pull iPhone manufacturing out of China is about to take a key step hand in hand with Foxconn. The Taiwanese firm, Apple’s main ally to produce its smartphone, plans to invest 700 million dollars to build a new plant in India. In this way, those of Cupertino would accelerate the diversification of their production line, especially due to the growing political tension between the United States and the Chinese regime.

Bloomberg indicates that the new Foxconn facility would be located on a plot of just over 120 hectares near Bangalore. Once the factory is operational, it would be used both to produce iPhone components and for the final assembly of the mobile.

On paper, the plan looks more than ambitious. The cited media outlet indicates that Foxconn’s new Indian plant It would employ around 100,000 people.. This is not a minor fact, considering that it is equivalent to half of the employees who currently work in the iPhone City from Zhengzhou, China. However, it is still unknown how long it would take to build and start up.

Although details are scant, some senior Indian government officials have already expressed optimism about the decision. «Very soon Apple mobiles will be manufactured in the state. Apart from creating around 100,000 jobs, it will bring a lot of opportunities for Karnataka. Under the visionary leadership of the Hon. Prime Minister Narendra Modi, we will do our part to make India a $5 trillion economy by 2025,” he tweeted. basavaraj bommaiChief Minister of Karnataka State.

Despite the approval of the authorities, this does not mean that, overnight, Apple will turn off the lights in China and move all iPhone production out of that country. The picture is much more complex than that..

Apple faces challenge of moving iPhone production out of China

iPhone 14 Pro |  china iphone

Concentrating the manufacture of the iPhone — and other products — in China was the strategy that allowed Apple to become what it is today: the most valuable company in the world. In fact, it was Tim Cook who led the plan to set up a production line according to the company’s requirements.

However, the need to diversify the origin of their devices has become imperative in recent years. Something that was boosted by COVID-19 and the sanitary blockades, but that those of Cupertino were considering even before the pandemic began.

It is estimated that 90% of Apple products come from China, but this percentage rises when talking only about the iPhone. It is that 98% of apple smartphones come from that country. And while it is true that some models have been manufactured in India and Brazil for some time, in both cases the figures are derisory.

In 2021, for example, some 250 million units of the iPhone – in all its current models – were produced in China. Work that was in charge of Foxconn, Pegatron and Wistron Corporation. That same year, only three million were manufactured in India, while another two million left Brazil. It is true that since then Apple made the decision to assemble the iPhone 13 and 14 in Indian lands, but the difference continues to be overwhelming in favor of China.

Thus, it is estimated that moving just 10% of iPhone production out of China would take about 8 years. So today it is too early to tell what impact Foxconn’s new plans will have in India, provided they come to fruition of course.

If the Taiwanese firm does establish its new factory in Bangalore, it will be interesting to see what happens to its rivals who also work for Apple. In recent times, Californians have urged their partners to migrate production of their products to countries like India and Vietnam. It is not an easy mission to achieve, considering not only the costs, but the political tension between Indians and Chinese over a border dispute.

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