Tim Cook and Apple Make a Move That Has The Potential to Anger China

Sep 29, 2022

Apple does not want to be shocked anymore. Like the rest of the multinationals, the iPhone producer has been hurt by the covid-19 outbreak, which has compounded supply chain problems.

The stringent restrictions and lockdowns enacted in China to stop the spread of the virus have disproportionately harmed several Western corporations' local suppliers. The zero-covid policy in China has been a nightmare for suppliers, who have been forced to temporarily stop parts of their operations or have their personnel work under unusual conditions, such as living on production sites.

This reliance on China has created several problems, which firms have been attempting to answer since the epidemic outbreak. The most pressing issue is supply chain diversity or attempting to have suppliers locally and in diverse parts of the world.

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Additionally, India Will Produce the iPhone 14

Apple has just responded. The Cupertino, California-based company will now manufacture certain units of the latest iPhone, the iPhone 14, in India, a noteworthy first.

"The new iPhone 14 series contains game-changing new technology as well as critical safety features." "We're thrilled to be producing the iPhone 14 in India," Apple stated in a statement on Sept. 26, confirming rumors.

The iPhone 14 will be produced in India by Foxconn, Apple's long-time supplier with a plant on the outskirts of Chennai. These phones will be marketed locally in the next few days, as well as exported to other markets.

Apple has just responded. The Cupertino, California-based company will now manufacture certain units of the latest iPhone, the iPhone 14, in India, a noteworthy first.

"The new iPhone 14 series contains game-changing new technology as well as critical safety features." "We're thrilled to be producing the iPhone 14 in India," Apple stated in a statement on Sept. 26, confirming rumors.

The iPhone 14 will be produced in India by Foxconn, Apple's long-time supplier with a plant on the outskirts of Chennai. These phones will be marketed locally in the next few days, as well as exported to other markets. This decision enables Apple to fulfill two critical goals. Despite the fact that the majority of iPhone manufacture remains in China, the tech titan will diversify its supply chain.

The choice also enables Apple to fully establish itself in a burgeoning sector where its market share remains quite low. According to a Counterpunch Research analysis of smartphone shipments in the second quarter of 2022, Apple has just a 3.8% market share in the world's second smartphone market.

China's Xiaomi leads the Indian smartphone industry with a 19% market share, followed by South Korea's Samsung with a 19% market share as well. According to Counterpunch, smartphone shipments in India surpassed 37 million devices between April and June, a 9% rise year over year.

However, the market is down 5% year on year. According to the survey, Apple "remains the top-selling brand in the ultra-premium class," which includes phones costing at least $650 or 45,000 rupees. "Increasing 'Make in India' capabilities for both domestic and export consumption, offline push through repeated discounts, and customers' brand preference helped Apple maintain its premium sector lead."

"The launch of its own e-store, iPhone SE 2022, and incentives on other models will further push Apple's shipments in the next quarters," it added.

Apple launched the iPhone 14 in early September, with a starting price of 79,900 rupees (about $980) in India. Apple will be able to attract customers searching for the newest technologies by making its new products locally. The company will also benefit from local help when the Indian government is looking for any way to stimulate the IT industry.

According to a new report issued on September 21, JPMorgan analysts estimate that Apple will shift 25% of its whole iPhone assembly line to India by 2025 to diversify its supply chain. They also stated that by late 2022, 5% of iPhone 14 production would be relocated to India, with a major decision to be made three years later.

In addition to shifting 25% of iPhone production to India by 2025, JPMorgan analysts believe the business might shift 25% of other product lines, including AirPods, Mac, Apple Watch, and iPad, to the nation.

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