After years of China-based production, Apple has begun production of its iPhone 14 in India.
Throughout the pandemic, many companies realised their dependence on Chinese production. China’s zero-COVID policies and accompanying business shutdowns, caused major supply chain issues for many corporates. One key issue for Apple was a global shortage of computer chips.
Secondly, geopolitical tensions between China and the US have failed to subside with many in the US still suspicious of Chinese technology and anger over China’s use of forced labour concentration camps in its Xinjiang region against wider concerns about Chinese working conditions.
This week, Apple announced a production line in Chennai, eastern India which marks the first time the company will assemble iPhones outside of China in the same year they were released.
Apple remains an online-only presence in India, opening its Apple Store online in September 2020. It is yet to confirm the date of a physical store in the country.
As it stands, Apple holds only a 4% market share in India, the second-largest global smartphone market. For reference, Apple has over 50% of the total US market and dominated global premium smartphone sales at 78%. Analysts have explained the gap as owing to the much more affordable South Korean and Chinese smartphones available. Apple will move 5% of its iPhone production to India by the end of 2022, with plans for a quarter of its production to based in India by 2025.
Outside of India, Apple has unveiled plans to produce one fifth of all iPads and Apple Watches as well as at least 50% of its AirPods in Vietnam by 2025, marking a shift in production from China to India and Southeast Asia.
Apple is not the only US company looking to disentangle its supply chains from China – with both imports and exports affected. Earlier this year, President Biden instructed chip-making giants Nvidia and AMD to restrict exports of their advanced AI chips. The dispute over TikTok’s use in the US is ongoing, with negotiations between the Biden administration and the Chinese-owned app stumbling over a security agreement.
Talking points: What other companies are moving their operations away from China? What is the current approach to Chinese technology firms within the UK government?
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