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Apple reportedly pivots India as iPhone production base with no near-term plan to make iPads and Macbooks there

Jingyue Hsiao, DIGITIMES Asia, Taipei 0

Apple CEO Tim Cook and Indian PM Narendra Modi in 2016. Credit: AFP

Apple CEO Tim Cook, who has built China as Apple's primary manufacturing base, is making efforts to reduce its reliance on China, with India being one of the major production hubs primarily for iPhones for the foreseeable future.

Bloomberg, citing people with knowledge of Apple's plan, reported that Apple is diversifying away from China slowly so as not to provoke China's retaliation and is trying to build India as the production location for iPhones and accessories, Vietnam for production of AirPods and Mac assembly, Malaysia for some Mac production, and Ireland for some simpler products. Apple also intends to decrease its reliance on chips that are made in Taiwan, which is more challenging than device-making.

According to the report, Apple has assembled hundreds of employees to form the so-called "tiger teams" to tackle the weaknesses in its supply chain, with the teams setting up shop in suppliers' factories across countries to assess facility maintenance schedules and find backup suppliers for every component.

Despite India's efforts to attract suppliers for MacBooks and iPads, sources told Business Today that manufacturing PCs and tablets in India is not on Apple's roadmap for the next two to three years. They added that Apple is currently not making the Pro models of iPhones in India, and if Apple is really looking to expand its manufacturing base in India, it will first make the Pro model, instead of making a completely different product, such as MacBooks and iPads.

Still, Apple is aggressively expanding the production of iPhones, the product that accounts for about half of Apple's sales, in India. According to Bloomberg, Apple made 6.5 million out of the 200 million iPhones in India in 2022 and plans to increase its iPhone production in India for 2023 to 10 million, potentially reaching more than 15 million units in 2024.

Although India is Asia's second-largest PC market, the demand for PCs and tablets is not making a strong case for Apple to move its suppliers to the South Asian country, Business Today reports. However, it is noteworthy that Apple was the major brand in India that saw its shipments of PCs and tablets grow by more than 60% in 2022, according to Canalys' market tracker.

Apple suppliers production base

Manufacturing facilities

FY15

FY16

FY17

FY18

FY20

FY21

China

336

346

355

380

259

262

Japan

131

126

137

128

96

101

US

73

78

57

65

49

74

Taiwan

37

41

54

55

37

73

South Korea

34

29

35

41

30

42

Vietnam

14

18

20

18

23

27

Singapore

13

12

13

11

14

24

Malaysia

23

23

17

17

15

24

Thailand

17

19

16

16

19

22

Philippines

20

19

17

19

18

18

India

0

1

5

8

9

11

Others

63

66

50

49

40

55

Source: Apple's supplier list, compiled by DIGITIMES Asia, April 2023