NEW DELHI (AP) — Apple Inc. will manufacture its iPhone 14 in India, the company announced on Monday, as makers shift production from China amid geopolitical tensions and pandemic restrictions that have disrupted many supply chains. industries.
“The new iPhone 14 lineup introduces groundbreaking new technologies and important security capabilities. We are excited to manufacture iPhone 14 in India,” Apple said in a statement.
Apple unveiled its latest line of iPhones earlier this month. They will have improved cameras, faster processors and longer lasting batteries at the same prices as last year’s models.
India is the world’s second largest smartphone market after China, but Apple’s iPhone sales have struggled to capture a significant share of the market against competitors’ cheaper smartphones.
The Cupertino, Calif.-based company’s announcement comes as part of Prime Minister Narendra Modi’s push for local manufacturing, which has been a key goal of his government since taking office in 2014.
The tech company has bet big on India, where it started manufacturing its iPhone SE in 2017 and has since gone on to assemble a number of iPhone models there. Apple opened its online store for India two years ago, but the pandemic has delayed plans for a flagship store in India, according to local media.
The latest model will be shipped by Foxconn, a major iPhone assembler, whose facilities are on the outskirts of Chennai, a city in southern India.
Apple is likely to shift about 5% of its iPhone 14 production to India from the end of this year, increasing it to 25% by 2025, according to a JP Morgan report cited by the agency. Press Trust of India.
Analysts expect nearly a quarter of all Apple products to be made outside of China by 2025, up from around 5% currently. Supply chain risks such as the strict COVID-19 lockdowns seen in China are likely the trigger for these relocation efforts that will continue over the next two to three years, according to the report.
“Apple has been trying to diversify its supply chain for some time, but these efforts have intensified over the past two years due to trade sanctions between the United States and China,” said Canalys analyst Sanyam Chaurasia. .
Last year, the tech giant manufactured around 7 million iPhones in India. This news is expected to significantly increase Apple smartphones made in India, he added.
He said the plan to manufacture more iPhones in India could also lead Apple to lower its prices for the Indian market, making it more competitive. “You can adopt a more aggressive pricing strategy if you manufacture locally,” Chaurasia said.
Most of Apple Inc.’s smartphones and tablets are assembled by contractors with factories in China, but the company started asking them in 2020 to look into moving some production to Asia. Southeast or other locations after repeated closures to combat COVID-19. disrupted its global product flow.
Apple has not released details, but reports indicate the company plans to set up assembly of tablet computers and wireless headphones in Vietnam.
Other companies maintain or expand their manufacturing in China to serve the domestic market while shifting export-oriented work to other countries due to rising wages and other costs, as well as difficulty in foreign executives to travel to China due to anti-COVID-19 travel. limitations.