racing to the production line

Will Apple ever make new iPhone models in India before it does in China?

Two months after launching iPhone 14 production in China, Apple plans the same in India.
Ramping up local manufacturing.
Ramping up local manufacturing.
Photo: Francis Mascarenhas (Reuters)
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Apple will begin making its newest iPhone model in India a mere two months after it did in China.

The move is “narrowing the gap between the two countries but not closing it completely as some had anticipated,” Bloomberg reported today.

In the past, new iPhone models only got assembled in India 7-8 months after hitting the market. The iPhone 14 will not be ready for its September launch, but likely by October or November.

Foxconn’s Tamil Nadu factory, which produces iPhone 11 and 12, is likely to make iPhone 14, too, according to analyst Ming-Chi Kuo of TF International Securities Group.

If true, “it’s an important milestone for Apple in building a non-Chinese iPhone production site,” Kuo tweeted. “It implies that Apple is trying to reduce the geopolitical impacts on supply and sees the Indian market as the next key growth driver.”

Apple’s production gap between India and China is closing

Apple only began producing—rather, assembling—in India in 2017. It started off with its least expensive model, iPhone SE. Over time, newer models joined the list even if in small numbers.

Apple’s flagship iPhone 13 was released in September 2021, but the Cupertino-based firm began its trial production in India three months after the launch.

The $2 trillion firm is now using India more amid China’s economic meltdown and a souring of the US’s ties with that country.

“The company has been working with suppliers to...shorten the lag in production of the new iPhone,” Bloomberg reported.

The perks of producing in India for Apple

Having tested India as a manufacturing base over the past two years, it is not impossible to imagine Apple emphasising India over China, according to Navkendar Singh, an associate vice-president with International Data Corporation (IDC) India.

“It makes sense to start with the latest model here. Even if at small volumes,” Singh said.

There are big incentives to stepping up local production.

For instance, before the India models hit the store shelves “Apple pays around 20% duty that can impact pricing,” said Tarun Pathak, research director at Counterpoint Research. With the launch happening just before the country’s Diwali festive season and the following holiday stretch, “local assembly would surely help Apple save on these duties,” he said.

Will India ever replace China as Apple’s main hub?

Matching China’s pace of production is still mostly a distant dream for India.

Massive barriers like the lack of a component ecosystem remain, according to Pathak. Ironically, these components are supplied by the Chinese themselves. Besides, New Delhi’s relationship with Beijing isn’t warm at the best of times.

India also may not be the easiest place to do business in. Apple’s plan to launch physical stores in the country has been in cold storage; suppliers Foxconn and Wistron have got flak for allegedly mistreating workers.

“To replace China as primary will take time in terms of scale and volume, plus infrastructure and skillset,” IDC’s Singh said. “It will take a few years.”