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Apple begins exporting India-made iPhones to European markets
- new299 7y agoI’d be curious to know which parts of the manufacturing process are carried out in India. I assume it includes “final assembly”. But does all CNC work, PCB assembly happen in India? PCB assembly in particular, seems unlikely? The supply chains are all in China, and it’s a largely automated procsss.
- rubyn00bie 7y agoIt's been hard for me to find a definitive number [1], and what that actually means, but it looks like to labeled something as "made in India" companies are required to have 30% of the final product locally sourced. [1] https://indianexpress.com/article/technology/tech-news-technology/xiaomis-make-in-india-strategy-to-include-30-local-sourcing-criteria-2826436/ https://indianexpress.com/article/technology/tech-news-techn... I linked this article because the bit at the bottom: > According to the foreign direct investment rules [...] “sourcing of 30 per cent of the value of goods purchased will be done from India, preferably from MSMEs, village and cottage industries, artisans and craftsmen, in all sectors”
- mikepurvis 7y agoI feel like getting to 30% of the value would be a stretch if the ICs, PCB assembly, and possibly screen are coming from China and Taiwan/TSMC. Like, the case and battery are worth something, but not tons.
- londons_explore 7y agoIt's pretty easy to value custom built components whatever you like. They are either very cheap components, but you paid a massive r&d grant to have them designed for you, or they are very expensive components but you paid no r&d costs. Choose whatever suits to best avoid taxes, quotas, fees, and regulations...
- formercoder 7y agoThe magic of GAAP
- khuey 7y agoFor extra points make different choices in different tax jurisdictions.
- mikepurvis 7y agoI guess that's true. If you're not actually selling them other than in your device, you can argue that they're basically worthless as bits of plastic and metal, and all the "value" is being created by the India-based assembly process that turns them from parts into functioning phones.
- fastball 7y agoNot if you're paying X to produce these parts. You can't say "this part is only worth $10" if it's costing you $100 to produce.
- mikepurvis 7y agoDoes it actually cost $100 to produce an IC, though? Like, the manufacture of the device itself is relatively cheap, especially in volume— all the cost is R&D, test harnesses, simulation, license fees, etc.
- ksec 7y agoThat is not entirely true, you cant just name an R&D budget, you have to show it in some way.
- amdavidson 7y agoIt is super true if you are using outside resources for R&D/NREC. Line item on the PO or wrap it into the part costs.
- demodifier 7y agoThis particular requirement is tied to operating what's called a single-brand retail outlet in India. That would be Apple-owned Apple Stores. It is not clear to me if this is a requirement for foreign manufacturers who are manufacturing/assembling products in India and then exporting them.
- envolt 7y agoThis is why it took this much time for Apple to set it up.
- trevyn 7y agoThe phones are labeled "Assembled in India", not "Made in India", and have less than 30% locally sourced materials. There is some discussion to possibly meet this level eventually, but it is not currently the case.
- distant_hat 7y agoApple asked for and got exemptions to the 30% rule.
- dsl 7y agoApple already uses multiple suppliers for each stage of production, so shipping production lines to other countries wouldn't be that difficult. Beyond that you'd just be sourcing bulk components, which I'm sure their Chinese suppliers will happily ship to India. Raw materials like the aluminum could be locally sourced.
- umeshunni 7y ago> which I'm sure their Chinese suppliers will happily ship to India That's a good point. The requirements seems to be about locally sourcing components, not locally manufacturing them. It's entirely possible for a Chinese company to have a subsidiary in India that's supplying components to Apple.
- solarkraft 7y agoNote that largely automated processes are quite easygoing to move between regions, since labor cost is not a significant factor.
- avemuri 7y agoI think it's still done by Foxconn, just at an Indian facility. Chinese company in India, not domestic capability.
- AareyBaba 7y agoFoxconn is a Taiwan based company.
- etaioinshrdlu 7y agoIt would be Courageous to move all production out of the PRC, or any other totalitarian state. Interesting to note the article mentions iPhone 6, 6s and 7. I wouldn't have guessed these were still in production!
- rodgerd 7y agoA few companies locally offer the 6S as their corporate phone; given it retails for a quarter(!) the price of an Xs it's not hard to see why.
- vbezhenar 7y agoiPhone 6 is surprising indeed, because upcoming iOS 13 does not support it. Selling devices which will stop updating in a few months sounds very bad.
- 43920 7y agoYeah, it's rather strange that Apple's dropping so many recent devices in iOS 13, especially since they specifically talked about improved performance on the 6 in the iOS 12 announcement [1]. They also dropped the 6th gen ipod touch, which they were still selling up until a few months ago. [1] https://singjupost.com/tim-cook-at-apple-wwdc-2018-keynote-full-transcript/2/ https://singjupost.com/tim-cook-at-apple-wwdc-2018-keynote-f...
- xbmcuser 7y agoWhy do you think they started updating system/apple apps outside of the iOS version releases. They can keep updating the apps and give security updates to the older version of iOS for previous gen phones.
- 43920 7y agoDo they actually do this? AFAIK, almost all the system apps are bundled with the OS, and don't recieve any updates after the next version is released; the last time I remember them ever releasing a security update for an old version was the certificate validation issue a few years ago.
- margeatwork 7y agoAs a mother who recently found out that the Chinese communist party has been snatching kids away from their Uighur mothers and fathers and placed in Chinese concentration camps to be brainwashed, and thus have decided to stop buying any and all ‘made in China’ products whenever possible. I just want to say Thank you to any and all corporations that are moving out of China. It will make my shopping easier.
- dang 7y ago"Eschew flamebait. Don't introduce flamewar topics unless you have something genuinely new to say. Avoid unrelated controversies and generic tangents." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html Please don't create accounts to break the site guidelines with.
- margeatwork 7y agoThanks for not letting this old lady have a say :) I am sure your mom is proud of you
- jorblumesea 7y agoIs there any concern that the PRC issues are just a symptom of a developing nation bootstrapping? What are the chances that India does the same? Obviously China has some specific cultural issues but it might be hard for developing nations to resist the temptation to steal Western tech.
- techie128 7y agoI believe India has had a better track record than China as far as IP is concerned. The only concern I would have is India's patent laws are different from the US. Evergreening of drugs has been repeatedly rejected.
- saidajigumi 7y agoit might be hard for developing nations to resist the temptation to steal Western tech. IMO this contains a major misconception: that any country/region/etc that takes on a production role does not also intrinsically gain competency in that kind of production. If company X goes to country Y to produce a product, then X is "teaching" Y how to do that kind of production, period. No "stealing" necessary. This is a big part of a positive feedback cycle that has driven China's current manufacturing base. Not just China – I've seen it cited in a few places that Apple itself, by heavily relying on Samsung as an early iPhone supplier, helped significantly to establish Samsung as a major smartphone competitor.
- mc32 7y agoThere are two main issues with IP and China. One is outright theft (the old fashioned way), Two is forcing local ownership and IP sharing. It's the latter that's most problematic for foreign businesses mfg in China. India AFAIK, unlike China and Russia, doesn't contractually force foreign concerns to hand over IP.
- techie128 7y agoWhile this is great news for India, it is sort of expected. Chinese mobile companies have been manufacturing in India and produce 80-90% of their phones locally. There are clear benefits for Apple here. China, as a manufacturing destination, has become less attractive due to rising wages and US-China trade war. Higher wages are good for Chinese people but not great for manufacturing. India is a cheaper destination and the recent government has been very business friendly. India now ranks 77th in the ease of doing business compared to 130th a few years ago. India has heavily invested in building out basic infrastructure like roads and power. It has also cracked down on corruption and a lot of government services have been digitized to reduce opportunities for corruption. Combined with a cheap labor force that speaks English is a great recipe for anybody looking to manufacture goods at a cheap price. Escaping the US-China trade war is a side benefit for Apple.
- kevin_thibedeau 7y agoWater scarcity is going to be a problem.
- azernik 7y agoAs far as I know Apple's manufacturing process is not particularly water-intensive.
- techie128 7y agoIndia has plenty of water. The problem plaguing South India, specifically Chennai, was anticipated. The central government was fixing it. However it lacked sufficient support from the state government.
- tsjq 7y agoNov-Dec : wooo. Chennai is flooded. (after 1night heavy rain) May-June : wooo. Chennai is parched. just utter callous ruling that state .
- unmole 7y ago>The central government was fixing it I really don't want to start a political argument on HN but this is nonsense. How exactly was the central government fixing it? > However it lacked sufficient support from the state Since the state's Chief Minister Jayalalitha passed away, the state government has been in the central government's pocket. The central government could have gotten away with virtually anything. And the AIADMK is officially part of the NDA. So, there is no way I'm buying the 'no support' theory.
- fmajid 7y agoIt’s a bit strange: the EU has not levied tariffs on China, so it would make more sense to ship Indian iPhones to the US in partial replacement of Chinese ones and send the Chinese ones to Europe instead.
- lovemenot 7y agoIt would be strange indeed if US Govt and Apple were the same entity. If USG wants more of these non-China phones in US markets, what concessions will Apple get in return?
- hourislate 7y agoHope it works out for them. It was a disaster for NOKIA. https://www.businesstoday.in/magazine/features/nokia-chennai-plant-nokia-tax-dispute-vrs/story/208580.html https://www.businesstoday.in/magazine/features/nokia-chennai...
- toast0 7y agoI don't think Nokia's many problems were connected to manufacturing phones in any particular place, or connected to them manufacturing phones in many places.
- rorykoehler 7y agoI have mixed feelings about the move of manufacturing to India. Whilst I would like Indians to be economically successful I can't ignore the ecological disaster that is happening in their country. It is absolutely terrifying. The air in Mumbai was unbreathable when I visited and it wasn't even ranking remotely near the top in the most polluted city air in India at the time (Delhi's was 3x as bad). Adding to this the much publicised water shortages, growing population putting strain on the already way over-burdened infrastructure, accelerating pace of urban development and a healthy democratic culture which doesn't instil confidence of them being able to quickly rectify these problems once Chinese style growth has been achieved I can only predict a disaster of biblical proportions for India in the not too distant future. I hope I'm wrong but I fear I'm not.
- ksec 7y agoThe manufacturing site and everything was set 15 years ago in China with very little pollution consideration in mind. I hope they have learned their lesson and these manufacturing won't bring as much pollution / unit. While I don't expect it to be zero pollution, I just hope improvement are being made, and since Foxconn is working with Apple, I believe they will surely force a few criteria.
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- mindfulplay 7y agoWestern concerns imposed on developing countries is not a good idea. Life here is safe and sound for us to think about climate change and other things. When people in India don't even have clean water or electricity they shouldn't give a shit about environment or other things. It took the US 200 years of development before it started working about these things. And the US is / was a developed nation.
- solarkraft 7y agoThis does not make climate change less of an issue. We're at an important turning point and the developed nations just can't stop it alone. Of course they should be doing way, way more and support ways of cleaner development financially.
- spaceengineeer 7y agoI would imagine at this point, Apple or any American companies doing business in China is kind of like this https://www.reddit.com/r/PublicFreakout/comments/cbl28z/standing_man_hong_kong_youngster_standup_against/ https://www.reddit.com/r/PublicFreakout/comments/cbl28z/stan... Being sucker punched in the face with no way to fight back
- codeisawesome 7y agoHow do giants deal with the lack of a fast moving courts system?
- caymanjim 7y agoMostly through bribery and the use of influence pedalling. I'm not saying that Apple will directly engage in these practices, or condone them, but whenever you have a poor country and an inefficient bureaucracy, someone is paying someone to keep things moving. In the US we've largely legalized bribery and buying influence, via unlimited campaign contributions and lobbying. The same thing happens everywhere else in the world, but it's still more under the covers there.
- tsjq 7y agois this the signs of beginning of end of 'Made in China' era ?
- jaimex2 7y agoDepends if China caves to pressure or not.
- lota-putty 7y agoIs there any Ideal-Developed-Nation out there now so that we can compare others to it?
- Arun2009 7y agoJust an aside: one thing people who harp on India's population problem seem to miss is that the fertility rates in India are on a steady downward trend. Indeed, it's below replacement level in several Indian states. See here: https://en.wikipedia.org/wiki/List_of_states_and_union_territories_of_India_by_fertility_rate https://en.wikipedia.org/wiki/List_of_states_and_union_terri... . The literacy rates too are improving ( https://en.wikipedia.org/wiki/Literacy_in_India https://en.wikipedia.org/wiki/Literacy_in_India) as are the poverty levels (https://en.wikipedia.org/wiki/Poverty_in_India https://en.wikipedia.org/wiki/Poverty_in_India). It's no coincidence that India's poorest states are also its most populous and also most illiterate. They also happen to wield the most political power in India. The trouble is that India has a social bootstrapping problem. India's governance depends on the leaders Indians elect, which means that the electorate sets the policy followed by the leaders. And this electorate is largely poor and illiterate. This means that vastly sub-optimal policies get followed than what would be ideal. Often religious, casteist and nationalistic tropes are an easier sell than those based on science, commonsense and reason. But it also has the advantage that draconian policies that oppress the citizens don't get implemented.
- draw_down 7y agoIs that “an aside” or just off-topic? Come on
- baybal2 7y agoVery analogous to China. The wealthy south is a political wasteland despite all notions of "powerful southerners running things," while Henan has has mere county level cadres on the committee (an extremely unlikely posting) In is both a blessing and a curse that the political process happens largely outside of here.
- kitcar 7y agoI wonder if these are refurbished units (as they are the older models)
- rajekas 7y agoIt's possible without being patronising or racist to say that India needs to follow a different model of development than the western one. In fact, that idea was central to the Gandhian independence struggle - just read the great man's Hind Swaraj! There are many reasons for doing so. For one, we don't have colonies we can screw over - i.e., India's India - while enriching ourselves. Assuming we would want to do that at all. We also don't have the window of opportunity that China had for becoming a manufacturing hub. That's been done and while we can compete for a percentage of the spoils, it will never be the gold rush that took manufacturing to China. The politics of globalization alone will ensure that. Second, we don't have the luxury of several decades of uninterrupted "development" before thinking about the environment. Climate change is going to hit us hard well before that, and one look at the water crisis should tell you that the basic necessities of life will need to be carefully managed. I have nothing against assembling iPhones in Bangalore. Or becoming the world capital of CRISPR technologies. However, those can't become the driving forces of a future India. We need to think boldly beyond those constraints. I am not saying returning to a romantic conception of an ideal past, but a detour around the mess that industrial capitalism is already creating and will continue to create if we don't think of alternatives.
- mindfulplay 7y agoIf anything this will help lift a lot of people out of abject poverty and disease. Yes money will get filtered through politicians and corrupt machinery, but the people and their children will have the tools and education over time to course-correct their own country.