• Source:JND
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India is seeing growth in Apple’s local manufacturing and sales. This growth, however, still does not measure up to India’s peak growth when compared to China. McGee, a former Financial Times journalist, Apple correspondent, and now author of Apple in China, outlines why geopolitics, policies of governments, and the supply chain issues Apple had forced them to move out of China. This is the reason for diversification away from China and why India is not growing at the same level.

Why Apple Shifted Away from China

Per McGee’s interpretation, the COVID-19 lockdown in Shanghai in 2022 was a pivotal moment. An Apple executive shared the assumption that China is no longer a reliable supplier. This caused Apple to look into different potential locations for production, and India was an optimum choice.

Tim Cook’s ‘China-Like’ Vision for India

Tim Cook had hoped India would follow a trajectory similar to China for the “India-Like” vision to come true. This, however, wasn’t the case because of “regulatory pushback”. India’s more stringent rules than China imposed on Apple needed foreign businesses to have a trigger level of 30% components made part locally stifled significant growth early on in Apple’s entry into India. However, a policy shift in 2017 enabled Apple to partner with Wistron to begin assembly of iPhones in India.

  • Apple’s online store started operating in 2020.
  • The first flagship store was opened in 2023, a decade and a half after the first store in China.
  • India’s iPhone Manufacturing Milestones

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India has achieved a lot in a short period of time regarding iPhone production:

  • Started with only the SE models
  • By 2023, they were manufacturing flagship models with no shipping delays from China

What’s Holding India Back?

Even so, McGee states, “India ramped up from zero to 15 million iPhones annually from 2016 to 2023—that's just 7% of global shipments—in stark contrast to China’s 153 million at the seventh-year mark.”

One engineer joked Apple is assembling ‘Made-in-India’ iPhones, China is disassembling and reassembling them, and sending them back to India for assembly.

Key challenges:

  • Dependence on Chinese components
  • Logistical costs negate India’s low labor advantage
  • Limited supply chain independence

The Road Ahead

According to McGee, while it does look like Apple has plans to make India a manufacturing hub, the infrastructure will take an additional 5-10 years. An Apple engineer said having one supply chain servicing China and India makes those operations more complicated than resilient.

Conclusion

It’s hard not to give credit to Apple for their growth in India, as newer models are now released in sync with other countries and are being assembled domestically. From China’s point of view, India is still quite far behind. But with Apple’s attempt at shifting their manufacturing focus to India, the strategy heavily relies on the execution of establishing a solid supply chain, which unfortunately seems to be years away.