Apple’s much-anticipated annual autumn launch event is set to take place on September 9 in the United States. As per tradition, the new iPhone 16 and iPhone 16 Pro series are expected to be unveiled, and the supply chain is in full swing, preparing for the launch. This year, however, marks a significant shift as, for the first time, the iPhone Pro series is being assembled not only in China but also in India, drawing widespread attention from the industry. Indian media outlets have hailed this development as a major milestone.
A Shift in Production Dynamics
According to a recent report by Bloomberg, Foxconn’s factory in Tamil Nadu will begin producing the iPhone 16 Pro and iPhone 16 Pro Max models. This move has been met with enthusiasm within India. The website ‘siliconindia’ reported that the upcoming iPhone 16 Pro could signify a significant shift in Apple’s manufacturing strategy in India. The expansion of Apple’s production in the country is also seen as a positive signal for the growth of India’s electronics manufacturing industry, potentially attracting more foreign direct investment and boosting India’s position in the global supply chain.
A Growing Presence in India
Apple has been manufacturing phones in India for several years, but the majority of these have been older models. According to statistics, India currently handles part of the production for models including the iPhone SE, iPhone XR, and the iPhone 12 through iPhone 15. In 2023, Indian factories assembled approximately 30 million iPhones, with the capacity increasing to 18 million units in the first half of this year. These devices are not only supplied to the Indian market but are also exported to the United States and other international markets.
The increase in Apple’s production capacity in India has also led to the creation of local jobs. ‘siliconindia’ cited a recent report stating that since the introduction of the Production Linked Incentive scheme by the Indian government, Apple and its suppliers have created about 165,000 direct jobs. Additionally, three contract manufacturers in India, including Foxconn, Wistron (now part of Tata Electronics), and Pegatron, have created 80,872 direct jobs, while a broader supplier network, including companies like Salcomp and Motherson, has created approximately 84,000 direct jobs.
Challenges and Quality Concerns
However, the Made in India tag has faced criticism in recent years. In July, the Taiwan-based Central News Agency reported that although the proportion of iPhone 15 units assembled in India was only 10%, there were numerous issues, including a yield rate of just 50% and problems with hygiene management, leading to poor sales. When the India-made iPhone 15 was launched on September 22 last year, many local customers refused to purchase it due to higher prices compared to regions like Europe and the Middle East, and concerns about quality.
The British ‘Financial Times’ recently reported that in an iPhone component factory operated by an Indian company, only one out of every two components was intact and could be sent to Foxconn’s assembly plant. This 50% pass rate is far from Apple’s long-held zero defect production standard. Social media videos by influencers have also highlighted various defects in Indian-assembled Apple phones, including visible fingerprint marks on the motherboard and dust inside the camera.
India’s Role in the Global Supply Chain
The ‘Nikkei Asian Review’ quoted a tech research firm, Counterpoint Research, as saying that while India has benefited as a major smartphone assembly hub outside of China, with brands seeking to diversify their production locations and develop the Indian market, its growth in Apple’s supply chain will be limited to the final assembly of products in the coming years. The production of more critical electronic and mechanical components will remain concentrated in China due to India’s current limitations in efficiency, infrastructure, and talent pool.
Foxconn’s Reversal and Apple’s Strategy
These challenges have led to a reversal for Foxconn, which has been gradually shifting its low-end manufacturing to India and Vietnam in recent years. In late July, Foxconn announced an investment of 100 million yuan in a new headquarters building in Zhengzhou, China, and began hiring a large number of new employees at its factory in the city to meet the production demands of the iPhone 16 series. This indicates that Foxconn is actively expanding its production lines in China to ensure the smooth launch of Apple’s new products.
Despite Apple’s efforts to diversify its supply chain and transfer more production to other parts of Asia in the face of geopolitical risks, China remains the company’s primary manufacturing base, reported the Hong Kong-based ‘South China Morning Post.’ In April, Apple updated its supplier list, showing that it added eight new suppliers in China while dropping four, marking the first time since 2021 that the number of new suppliers added in China exceeded the number removed. This shift not only reflects Apple
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