What Display Daily thinks: One of the interesting aspects of this story is Apple’s apparent unease with protests that happened post-pandemic in China. So, India is going to benefit from the need by Apple to find some sort of geopolitical stability, but it doesn’t mean it will find that in India.
The combination of a giant consumer base, a cost effective base to build manufacturing upon, and a general need to take defensive measures to protect its supply chain in case of future calamities, means that India has potential. Apple’s big bet on the country means that it’s going to drag a lot of companies with it into the country, whether they like it or not. In five years time, the display industry supply chain will not look anything it does today so, is that opportunity or threat for your business? Better get moving on making your India plans today.
Apple’s India Dream
There is a very interesting, and much more in-depth report on Nikkei if you want to dig deeper but I will try and capture the gist of it here. Apple is embarking on a significant shift in its manufacturing supply chains, with plans to produce more than 15 million iPhones in India this year, double the target from the previous year.
Apple’s suppliers in India are facing ambitious targets in preparation for a crucial product launch later this year. The company is seeking to expand its production capabilities in India by manufacturing more intermediate parts, such as metal casings, within the country, instead of merely assembling the final product.
The decision to shift production to India was prompted in part by disruptions in Apple’s largest iPhone assembly hub in Zhengzhou, China, caused by a COVID-19 outbreak and subsequent protests. This event served as a wake-up call for Apple, highlighting the need to diversify its supply chain and reduce its heavy reliance on China. India’s vast market, cost-effective labor, and attractive government incentives make it a compelling alternative.
However, the shift to India presents challenges for Apple’s numerous suppliers. They must relocate or establish new facilities in India, and negotiations with suppliers have been both prolonged and arduous. Companies are grappling with differing state regulations, language barriers, and visa issues for Chinese employees. The Indian government is also taking measures to ensure that local companies play significant roles in the manufacturing process.
For Apple, the ultimate objective is to establish India as a sustainable and dependable alternative to China. As part of this effort, the company plans to allocate new product introduction (NPI) of iPhones to India in the coming years. NPI involves close collaboration between brands and suppliers in developing and testing new products. By bringing NPI resources to India, Apple aims to demonstrate its commitment to technology development in the country.
