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Big setback to China as Apple may move iPhone 14 production to India: Report
The brokerage foresees that by late 2022, Apple could shift about 5% of iPhone 14 production to India. It also predicts that by 2025, from 5% presently, almost 25% of all Apple products will be produced outside of China.
Apple Inc. is looking to shift its manufacturing hub away from China and experts strongly believe the next choice could be India. As per a report from Reuters, JP Morgan analysts have predicted on Wednesday that the Cupertino smartphone maker may make one out of four iPhones in India by 2025.
Apple in search of alternate option
This comes as the tech giant looks to diversify its production units amid escalating geopolitical tensions and strict COVID-19 lockdown norms in China.
In the past couple of years, China has tightened its labour regulations. Simultaneously, allegations were also levied on Apple of breaching Chinese labour laws.
To manufacture iPhone, Apple depends a lot on Taiwan-based Foxconn Technology. With rising tensions between US and China over Taiwan, the company fears that it may hamper its businesses.
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Predictions for India
The brokerage foresees that by late 2022, Apple could shift about 5% of iPhone 14 production to India.
It also predicts that by 2025, from 5% presently, almost 25% of all Apple products—including Mac, iPad, Apple Watch, and AirPods—will be produced outside of China.
The JP Morgan analysts led by Gokul Hariharan, who is rated 4 out of 5 for estimated accuracy, say that the Taiwanese vendors such as Hon Hai and Pegatron could play a key role in the relocation to India. They also believe, in the medium to long term, Apple will qualify local India manufacturing suppliers.
Potential of India
According to a recently published analytical report from the Counterpoint, China added 67% of the global handset production in 2021. The report adds that in the same year, 16% of the world’s mobile phone manufacturing came from India. The country, the second-largest geography in terms of production volume, saw an over 5% YoY increase in production, powered by the production of Apple, Xiaomi, and OPPO smartphones.
The Indian conglomerate Tata Group was reportedly in talks with Wistron earlier this month to form a joint venture to make iPhones in India as part of Apple’s aim to reduce its production gap with China, a Bloomberg report mentioned.
