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Apple to move 40-45% iPhone production to India

wsj.com

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Re: Apple to move 40-45% iPhone production to India

#21

Post by seunosewa »

Reubend wrote: post #3
akmittal wrote: post #2

> Apple’s longer-term goal is to ship 40% to 45% of iPhones from India, compared with a single-digit percentage currently, according to Ming-chi Kuo, an analyst at TF International Securities who follows the supply chain. Suppliers say Vietnam is expected to shoulder more of the manufacturing for other Apple products such as AirPods, smartwatches and laptops.

I'm surprised it's so low. I know that they already have very established processes in China, and their contractors have probably invested a lot in tooling for those factories, but it seems interesting that they would still prefer to move less that 50% of their capacity there. Maybe they see India as carrying its own risks?

India has serious regulatory issues. Their govt is very interventionist too. Production cost is probably higher than China.

Re: Apple to move 40-45% iPhone production to India

#22

Post by simonbarker87 »

nixcraft wrote: post #10

Three hundred thousand workers work at a factory in China to make iPhones? I didn't realise how massive the production line is, considering they have a 23% market share, and the rest is all Android lead by Samsung. I am always surprised that Apple (or other Western tech giants) never considered building backup factories. Did they never think about geopolitics or natural disasters and panamics? Apart from that iPhone…

I’ve been in and around manufacturing for the better part of a decade. I’ve run a small factory myself and have friends and family working at all levels of some of the largest factories in Europe.

At the scale these things work out there’s no way to really “have a backup” not in the true sense that backup means. If you build a factory you use a factory - otherwise you’re wasting masses of money.

What you should do is diversify and leave the option to quickly (relative terms here, still many months) ramp up production in other factories should one have an issue.

Which is what most companies do. Manufacture rewards scale though so the diversification comes with its own set of problems (usually in logistics and stock management).

So they do think about it for sure but due to the physical nature of things it’s not a case of “have a backup and decide to start going one day at a new location.”

Re: Apple to move 40-45% iPhone production to India

#23

Post by akmittal »

reactspa wrote: post #5

This alone is going to be a huge driver of India's economy going forward. Interesting how globalism works.

This thought would have decent impect but can't be big factor for India.

China become big economy because they are making everything LEDs, toys, semiconductor, cloths

Re: Apple to move 40-45% iPhone production to India

#24

Post by throwaway4good »

India has had its share of strikes and protests over working conditions at Apple's Taiwanese suppliers:

https://www.reuters.com/world/india/food-poisoning-foxconns-...

Dozens released after protest at India plant of Apple supplier Foxconn

Police in India have released dozens of those detained for blocking a key highway in a protest against food poisoning at a Foxconn (2317.TW) unit, the country's second instance of unrest at an Apple Inc (AAPL.O) supplier factory in a year.

...

In December last year, thousands of contract workers at a factory owned by Apple supplier Wistron Corp (3231.TW) destroyed equipment and vehicles over the alleged non-payment of wages, causing damages estimated at $60 million.

Re: Apple to move 40-45% iPhone production to India

#25

Post by helsinkiandrew »

nixcraft wrote: post #10

Three hundred thousand workers work at a factory in China to make iPhones? I didn't realise how massive the production line is, considering they have a 23% market share, and the rest is all Android lead by Samsung. I am always surprised that Apple (or other Western tech giants) never considered building backup factories. Did they never think about geopolitics or natural disasters and panamics? Apart from that iPhone…

> I am always surprised that Apple (or other Western tech giants) never considered building backup factories. Did they never think about geopolitics or natural disasters and panamics?

They'll try to mitigate against issues with the supply chain but its very hard to eat the cost of having backup factories or using more expensive for something that might only happen every few decades or so (or longer)

Adding 5-10% to your product price or taking a hit of 5-10% on your profits for 10 years will likely mean you'll lose customers or shareholders to your competition long before there's another pandemic.

Re: Apple to move 40-45% iPhone production to India

#26

Post by fyresala »

iPhone made in China is no better than the cotton from Xinjiang.

Earlier the reports are workers in the China iPhone factory had a protest and brutal conflict with the local police. Reasons varied from unbearable working condition, the zero-covid policy, and being deceived about the compensation. After the local police oppressed the campaign, the government assigned headcounts to local villages, demanding them to fill in the factory slots. No wonder Apple loves China so much.

Apple and many westerners never understand the risk and the ethics implication of doing business in China. Apple has utilized the cheap labor at a level where can never be possible in the civilized world, as well as making great profit out of the upper class of China, who directly benefits from the oppression system of CCP or part of the party themselves. It turns out that in spite of all values that Apple promotes, it actually cares about nothing but the profit and its comfortable zone in China.

And I will not be surprised Apple will cease the plan in India as soon as China steps back from the zero-covid policy, as if all the blood has not been spilled.

Re: Apple to move 40-45% iPhone production to India

#27

Post by rdl »

I wish we could fix whatever prevents this from happening at scale in Mexico, too (with some high value production in the US and potentially Canada as well, and maybe some other supplies coming from the elsewhere in the Americas.). I wonder if it is infrastructure, regulation, labor, or what.

Re: Apple to move 40-45% iPhone production to India

#29

Post by threatofrain »

mikymoothrowa wrote: post #16
Reubend wrote: post #3

Earlier quoted context omitted.

I'm surprised it's so low. I know that they already have very established processes in China, and their contractors have probably invested a lot in tooling for those factories, but it seems interesting that they would still prefer to move less that 50% of their capacity there. Maybe they see India as carrying its own risks?

> they would still prefer to move less that 50% of their capacity there It is not Apple saying this. So, this is some Analyst doing a linear regression. So we can't read too much into this. It could be possible that India starts manufacturing 80% of iPhones. Or It could be less than the claimed 45% too. Also, if there's no reason for Foxconn to dismantle existing manufacturing facilities all at once.

> So, this is some Analyst doing a linear regression.

I'd note that Ming-chi Kuo is a very well known analyst.

Re: Apple to move 40-45% iPhone production to India

#30

Post by arcticbull »

rdl wrote: post #27

I wish we could fix whatever prevents this from happening at scale in Mexico, too (with some high value production in the US and potentially Canada as well, and maybe some other supplies coming from the elsewhere in the Americas.). I wonder if it is infrastructure, regulation, labor, or what.

I remember seeing a chart a while back that said the actual cost of manufacturing in China is roughly the same as in the US, one has much lower labor costs and the other much lower energy costs. At the time at least it was posited the benefit of China manufacturing was co-location of suppliers and shorter supply chains.

edit: [1] lists a BCG report from roughly when I was thinking and references a slightly earlier Bloomberg article [2].

Personally, I think China just has much better infrastructure, - in general - and specifically manufacturing, export and logistics. There's also momentum.

[1] https://www.sellerlabs.com/blog/chinese-manufacturing-afford...

[2] https://www.bloomberg.com/news/articles/2014-04-25/china-vs-...

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