14 DAY TRIAL // We’ve known for a while that Apple was working aggressively on an ambitious plan to reduce its reliance on its Chinese suppliers, and now it looks like the company is making good progress on this front
A recent report from the South China Morning Post reveals that no less than half of the entire iPhone production could be moved to India by 2027, as Apple continues its push to assemble more devices outside of China.
At this point, however, Apple is still far away from this target, as only 5 percent of the iPhones are made in India. But on the other hand, there are signs that the company is accelerating its investments in India, as its iPhone shipments doubled from April to December 2022 compared to the same period in 2021.
This means Apple sees India as a more important hub not only in terms of production but also as far as sales go, and this could be bad news for China in the short term.
Chinese companies already expecting dropping revenue
In fact, several Chinese suppliers are already impacted by Apple’s plans of moving production out of China. Goertek, one of the parts suppliers for the AirPods, expects its 2022 revenue to drop by as much as 60 percent, revealing that one overseas client requested a major drop in production.
On the other hand, suppliers in India are seeing their orders going through the roof. This, however, could prove to be a double-edged sword, as despite the accelerated production, only time will tell if Indian suppliers are prepared to handle the big volumes that Apple is typically working with.
But at the end of the day, it just looks like Apple’s plan of working with multiple suppliers, and therefore reducing the local impact on their operations, is making good progress, as this strategy could help prevent delays in the long term.