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iPhone shipments from India have doubled in the last three quarters - Apple accelerates the withdrawal of production from China.

Published: 2023-01-10

Apple nearly doubled India's iPhone exports from April to December last year compared to the previous full fiscal year. The volume of iPhone exports from India for three quarters amounted to more than $2.5 billion. This underlines how intensively the American tech giant is trying to diversify production, removing at least some of it from China.

Foxconn Technology Group and Wistron Corp., both iPhone assemblers in India, shipped more than $1 billion worth of Apple smartphones from the country in the first nine months of the fiscal year ending in March. Another contract manufacturer, Pegatron, will deliver about $500 million worth of Indian iPhones by the end of January. Such activity illustrates Apple's firm intention to expand operations outside of China. The recent chaos at the Zhengzhou plant showed just how vulnerable Apple's manufacturing chains are in China.

Apple began assembling the latest generation iPhones in India only last year, before that it produced models of previous generations. Meanwhile, the Indian authorities seem to be seriously intending to turn the country into an alternative to China's "world factory", especially since the recent events in the Celestial Empire have allegedly demonstrated the "unreliability" of the country. The publication reports that the easing of the anti-COVID policy has only accelerated the withdrawal of production from China.

India's huge labor reserves, support from local authorities and an attractive local market make the country a clear beneficiary of the exodus of foreign companies from China. Foxconn, Apple's largest supplier, began building production lines in India five years ago. An additional incentive was provided by government incentives, which signify the country's desire to become a global hub for the production of electronics.

A large population and low wages - at least 50% lower than in China - make India a very attractive destination for manufacturers working for Apple. The Indian Production-Linked Incentives (PLI) program provides additional benefits and benefits to foreign companies.

Today, iPhone manufacturers produce electronics in factories in southern India. However, production in the country is only just beginning to bear fruit. In 2021, 3 million mobile devices were launched in India, compared to 230 million in China.

Foxconn started releasing the iPhone 14 in India a few months ago, much earlier than expected. If previously the latest models began to be produced in India a few months later than in China, now this “lag” has been reduced to a few weeks. Today, Apple's three Taiwanese partners are releasing several generations of smartphones here at once, from the iPhone 11 to the iPhone 14.

However, Apple’s complete withdrawal from China is unlikely to be easy and quick, if at all, as all production chains have been debugged in the country for a long time. It will take at least 8 years for Apple to move only 10% of its production capacity to India - now about 98% of iPhones are produced in China.

However, the Indian authorities have big plans. In addition to smartphones, tablets and laptops are likely to fall into preferential categories - perhaps this will become an incentive for Apple to release not only iPhones here, but also other electronics, from headphones to MacBooks, and will also attract other brands. Finally, Apple intends to open the first Apple Store in India as early as 2023, after the company brings its activities in line with the requirements of the authorities for foreign retailers.