“Apple Triples iPhone Production in India to Reduce Dependence on China”

(Bloomberg) — Apple Inc. tripled production of iPhones in India, reaching $7 billion in the last fiscal year. This measure makes it possible to reduce its dependence on China.

The US company now makes nearly 7% of its iPhones in India through sprawling partners from Foxconn Technology Group to Pegatron Corp., people familiar with the matter said. It’s a significant leap for India, which accounted for an estimated 1% of the world’s iPhones in 2021.

Apple is exploring ways to reduce its dependence on China as tensions between Washington and Beijing escalate. Its longtime partners, which make most of the world’s iPhones in sprawling factories in China, have added assembly lines at a rapid pace over the past year, said the people, who declined to be named because the information is not public.

The world’s most valuable company last year grappled with chaos at Foxconn’s main complex in Zhengzhou, causing vulnerabilities in Apple’s supply chain and forcing it to cut production estimates. At the same time, Indian Prime Minister Narendra Modi has approved a series of incentives to boost local manufacturing.

Of total production, Apple exported $5 billion worth of iPhones in the year ending March 2023, nearly four times the previous period, the people said. Apple will likely try to make the next iPhones in India at the same time as China, sometime in the fall of 2023. If so, it will be the first time iPhone assembly has started simultaneously in the two countries. And if it continues to aggressively expand its suppliers, Apple could assemble a quarter of all its iPhones in India by 2025. US representatives declined to comment.

Even before the problems at the Chinese megafactory last year, Apple had recognized the need to diversify its supply chain. It successfully lobbied for incentives in India and lobbied suppliers Foxconn, Wistron Corp. and Pegatron to scale up locally. The trio, which together employ some 60,000 workers in India, make models ranging from the older iPhone 11 to the latest iPhone 14 in the country.

That helped put Apple at the center of India’s ambitions to become a major manufacturing hub and alternative location to China. Apple is one of the most demanding companies in the world when it comes to manufacturing: its production chain spans hundreds of companies around the world and employs millions, much of the number now in China.

Nota Original:Apple India iPhone Output Soars to $7 Billion in China Shift (1)

–With contributions from Mark Gurman and Debby Wu.

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