All is well in India’s manufacturing industry as the country is getting a mandate from Apple to manufacture its various products at its India plants and various OEMs who are supplying the components.
India is working hard to materialise its ambitious journey to be at the leadership position of 4th industrial revolution backed by its software and manufacturing capabilities. So the decision of Apple augers well for the country.
Even though Indian manufacturing and its related regulatory system are to be refined further to bring ease of doing business in the country, Apple’s decision will further boost its ambition to become the manufacturing hub of the world.
It is interesting to note that the company’s decision comes when global geopolitics is changing to end the hegemony of China as the epicentre of global manufacturing. Also, it is happening despite hopes that the Biden administration will ease trade tension between the United States and China.
According to analysts familiar with Apple’s decision, Cupertino headquartered American multinational technology company is planning to start making the iPhone 12 series in India as soon as this quarter. Apple is currently depended on its partners Foxconn and Wistron to produce previous generation iPhones, including the iPhone 11 series and the iPhone XR.
Arvian Research states that India has emerged as the second-largest production base for the iPhone and its business for the calendar year 2020 registered 60% year on year growth in India while the festive quarter, which saw the Apple India online store go Live just ahead of the Dussehra and Diwali festivals, registered 100% year on year growth.
“It is interesting to note that Apple has doubled its market share in the Indian smartphone space during the winter quarter. This is primarily due to the stellar performance of devices like Apple iPhone 12, Apple iPhone 11 and the iPhone XR. It helped the company to garner 4% of the market share,” states Arvian Research.
Even though happy over the good show by the company, Apple CEO Tim Cook made it clear that Apple’s business in India is still quite low relative to the size of the opportunity the country has opened up. Tim Cook is expecting that opening new retail stores in India will help the company to tap the market opportunity systematically.
Cupertino also plans to start the production of iPads in Vietnam as early as the middle of this year. The report said that Apple will also shift the production base of products like earphones, smart speakers, and computers out of China. The move will be part of the company’s ongoing diversification strategy.
Some media report states that the company is reportedly mobilising suppliers to increase the production capacity of its ‘affordable’ voice-activated smart speaker – HomePod Mini. Ever since the device was launched in 2020, it has been produced in Vietnam. Local production of other audio-related products and various AirPods line-ups in Vietnam has already been increased.
Sources also point out that the production of MacBook will also be shifted to the Southeast Asian country this year and that of Mac mini has already been shifted to Malaysia.
“There are several other tech companies that want to shift production base out of China. Imagining it two years ago was impossible, but it can be done now,” a supply chain manager told the publication. Apple suppliers are also following the shift and are looking to move to Vietnam. For example, supplier Foxconn has already invested USD 270 million for a subsidiary there. Also, Luxshare Precision Industry is ramping production in the country.
The report noted that Apple will now produce a considerable number of devices outside China. India is the second-largest production base for the iPhone.
The shift in base started in 2020 and is likely to continue in 2021 as US President Joe Biden said that the tariff policy by the Trump administration will not be immediately reversed.