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Apple to move 40-45% iPhone production to India
- reactspa 4y agoThis alone is going to be a huge driver of India's economy going forward. Interesting how globalism works.
- akmittal 4y agoThis thought would have decent impect but can't be big factor for India. China become big economy because they are making everything LEDs, toys, semiconductor, cloths
- throwaway3268 4y agoApple will end up moving 0% to India. Tiny manufacturing in India is a token. India is a very noisy democracy with absolute freedom of movement . Corporate slave labor in tens of thousands impossible in India.
- akmittal 4y agoApple has already moved 5-6% in last 2 years.
- ramshanker 4y agoI hope they bring the mmWave frequency enabled models to India also.
- akmittal 4y ago> Apple’s longer-term goal is to ship 40% to 45% of iPhones from India, compared with a single-digit percentage currently, according to Ming-chi Kuo, an analyst at TF International Securities who follows the supply chain. Suppliers say Vietnam is expected to shoulder more of the manufacturing for other Apple products such as AirPods, smartwatches and laptops.
- Reubend 4y agoI'm surprised it's so low. I know that they already have very established processes in China, and their contractors have probably invested a lot in tooling for those factories, but it seems interesting that they would still prefer to move less that 50% of their capacity there. Maybe they see India as carrying its own risks?
- akmittal 4y ago> India and Vietnam have their own challenges. > Vietnam’s manufacturing was growing quickly but was short of workers. The country has just under 100 million people, less than a 10th of China’s population. > India has a population nearly the size of China’s but not the same level of governmental coordination. Apple has found it hard to navigate India because each state is run differently and regional governments saddle the company with obligations before letting it build products there.
- brnt 4y agoAs of next year, India will be the most populous country in the world.
- peanuty1 4y agoIndia probably has been for some time now that we know China has been overestimating its population.
- deltree7 4y agoIndia has 5% manufacturing capabilities of China and will be at least 2x expensive and slow. India also has strong labor laws and local politicians still need votes
- mikymoothrowa 4y agoSorry, but how is this capability measured? And why is it being assumed here that labor laws need to be suppressed to make iphone production viable?
- deleted 4y ago[deleted]
- nixcraft 4y agoThree hundred thousand workers work at a factory in China to make iPhones? I didn't realise how massive the production line is, considering they have a 23% market share, and the rest is all Android lead by Samsung. I am always surprised that Apple (or other Western tech giants) never considered building backup factories. Did they never think about geopolitics or natural disasters and panamics? Apart from that iPhone will be cheaper in India because it cuts down all import duties, and who knows what other tax/land benefits the government of India/State government will provide them so that massive employment will be created. So it might help India in the long run, provided Indian governments give proper support to build these factories, especially in bureaucratic policies.
- Cwizard 4y agoMost of these supply chains basically didn’t have backup parts and you think they would consider building whole backup factories?
- raverbashing 4y ago> Did they never think about geopolitics or natural disasters and panamics? Not being ironic, apparently those "global MBA" types never heard of that. Their world view is probably also on continent-level and a couple of countries where labour is cheaper
- qwytw 4y agoAlso it would be irrational to think too much about pandemics and other black swan events
- mikymoothrowa 4y agoGiant iPhone factories are already coming up in India around Chennai and Bangalore. > who knows what other tax/land benefits the government of India/State government will provide https://en.wikipedia.org/wiki/Production_Linked_Incentive_schemes_in_India https://en.wikipedia.org/wiki/Production_Linked_Incentive_sc...
- simonbarker87 4y ago
- dredmorbius 4y agoPaywall: <https://archive.ph/Si9Oc https://archive.ph/Si9Oc>
- throwaway4good 4y agoIndia has had its share of strikes and protests over working conditions at Apple's Taiwanese suppliers: https://www.reuters.com/world/india/food-poisoning-foxconns-india-unit-triggers-protest-police-detain-dozens-2021-12-19/ https://www.reuters.com/world/india/food-poisoning-foxconns-... Dozens released after protest at India plant of Apple supplier Foxconn Police in India have released dozens of those detained for blocking a key highway in a protest against food poisoning at a Foxconn (2317.TW) unit, the country's second instance of unrest at an Apple Inc (AAPL.O) supplier factory in a year. ... In December last year, thousands of contract workers at a factory owned by Apple supplier Wistron Corp (3231.TW) destroyed equipment and vehicles over the alleged non-payment of wages, causing damages estimated at $60 million.
- fyresala 4y agoApple will have a hard time giving up their favorite slave labor
- arcticbull 4y agoMaybe them being smooshed between China concerns on one side and labor activism on the other will help improve working conditions.
- mayama 4y agoIndia has tricky labour laws, bureaucracy, land issues and labour unions to deal with when manufacturing at scale. But, it isn't unsolvable problem. Samsung, Xiaomi, Hyundai etc. manufacture millions of phones, tvs, cars etc. in India and are quite successful being #1 or #2. That Wistron issue seems more like coordination issue between different contractors when starting up new plant and there was no repeat of that issue.
- fyresala 4y agoiPhone made in China is no better than the cotton from Xinjiang. Earlier the reports are workers in the China iPhone factory had a protest and brutal conflict with the local police. Reasons varied from unbearable working condition, the zero-covid policy, and being deceived about the compensation. After the local police oppressed the campaign, the government assigned headcounts to local villages, demanding them to fill in the factory slots. No wonder Apple loves China so much. Apple and many westerners never understand the risk and the ethics implication of doing business in China. Apple has utilized the cheap labor at a level where can never be possible in the civilized world, as well as making great profit out of the upper class of China, who directly benefits from the oppression system of CCP or part of the party themselves. It turns out that in spite of all values that Apple promotes, it actually cares about nothing but the profit and its comfortable zone in China. And I will not be surprised Apple will cease the plan in India as soon as China steps back from the zero-covid policy, as if all the blood has not been spilled.
- alephnan 4y ago> Apple and many westerners never understand the risk and the ethics implication of doing business in X For clothing, people can check the label. Most consumers simply don’t care enough when fast fashion is cheaper and more convenient than “ethical brands”
- ClumsyPilot 4y agoSonetimes you go buy an ethical brabd, and then turbs out ut was from thevsame factoemry. Mahor brands like Nestle havecslavery in the supply chain, without chiba being involved
- mantas 4y agoFor Nestle, supply chain is the least evil thing. Hard to beat their baby formulas marketing Fuck Nestle.
- amelius 4y agoPeople never see the harm done so they are basically ignorant. Most people wouldn't eat meat if they had to kill an animal either.
- rdl 4y agoI wish we could fix whatever prevents this from happening at scale in Mexico, too (with some high value production in the US and potentially Canada as well, and maybe some other supplies coming from the elsewhere in the Americas.). I wonder if it is infrastructure, regulation, labor, or what.
- arcticbull 4y agoI remember seeing a chart a while back that said the actual cost of manufacturing in China is roughly the same as in the US, one has much lower labor costs and the other much lower energy costs. At the time at least it was posited the benefit of China manufacturing was co-location of suppliers and shorter supply chains. edit: [1] lists a BCG report from roughly when I was thinking and references a slightly earlier Bloomberg article [2]. Personally, I think China just has much better infrastructure, - in general - and specifically manufacturing, export and logistics. There's also momentum. [1] https://www.sellerlabs.com/blog/chinese-manufacturing-affordable/ https://www.sellerlabs.com/blog/chinese-manufacturing-afford... [2] https://www.bloomberg.com/news/articles/2014-04-25/china-vs-dot-the-u-dot-s-dot-its-just-as-cheap-to-make-goods-in-the-usa https://www.bloomberg.com/news/articles/2014-04-25/china-vs-...
- pclmulqdq 4y agoI doubt that a modern American worker will give you much higher quality than a Chinese worker, and the American will be very expensive.
- shapefrog 4y ago> labor You may think a Mexican (or a Canadian) is a cheap / poor worker - but that is simply because you can not comprehend small wage numbers.
- DiogenesKynikos 4y agoChinese GDP/capita is larger than Mexico's now, and wages probably reflect that. China is no longer as attractive to manufacturers as a low-wage platform. Its advantages are now more about the local supply chain, good infrastructure and local expertise.
- anton_ai 4y agohttps://www.youtube.com/watch?v=5Nf1I0owcC4 https://www.youtube.com/watch?v=5Nf1I0owcC4
- akmarinov 4y agoWait, didn’t they say they’ll need 8 years to move out 10%?
- akmittal 4y agoI don't think so. Last year Indias share was 2-3% and in 2022 it is expected to be 5%. With new plants coming up and existing plants ramping up, i thing 10% can be reached within next year
- akmarinov 4y agoThere's some research by Bloomberg that suggests otherwise - https://9to5mac.com/2022/09/30/apples-dependence-on-china/ https://9to5mac.com/2022/09/30/apples-dependence-on-china/
- tw1984 4y agoZero-covid or not, this is inevitable. iphones were used to be built in Shenzhen, it is now no longer economically viable to do so anymore as labor costs in Shenzhen is much higher, so they moved the factory to Zhenzhou. to chase more profit, they will always consider cheaper alternatives. It is actually good for the Chinese economy as such cheap labor jobs are not going to sustain further growth required to compete on a more skilled level globally.
- silisili 4y agoIt's good for China because they're just going to keep making them anyways and flood the market with their version.
- mikymoothrowa 4y agoTheir version is Huawei. Huawei phones are not allowed to be sold in _most of the world_
- guessbest 4y agoLooks like the Chinese android phone that has the most traction are BBK models, not Huawei. > But we must keep in mind BBK has multiple players in the game. Two of their brands make it to the top list in market share data. Oppo and Vivo each hold 10%, equating to a total of 20%. https://www.androidauthority.com/bbk-phone-manufacturer-808839/ https://www.androidauthority.com/bbk-phone-manufacturer-8088...
- mikymoothrowa 4y agoHuawei designs its own ARM based chips and modems that BBK and Xiaomi do not. Unrelated: India and SEA are where a good majority of these BBK phones are sold. And BBK tapped into the PPI scheme of India to start manufacturing in India > 3 years ago. Most phones sold in India are made in India.
- 4y ago
- retskrad 4y agoPeople love to give Jony Ive and Steve Jobs credit for the iPhone but no one gives Tim Cook credit for keep making the iPhone the most desirable product in the world in 2022.
- shapefrog 4y agoA lot of people like to give Leonardo da Vinci credit for the Mona Lisa, but no one gives credit to Laurence des Cars (President of Louvre) for getting 10million people to visit to see it in 2022.
- cypress66 4y agoThe louvre doesn't repaint the Mona Lisa each year. They don't even directly make the exhibitions on rotation that keeps people returning.
- shapefrog 4y agoThey constantly do work on The Mona Lisa and even put a new frame on it in the 1970s because people were holding it wrong. They dont track the version number in the same way, but I would speculate that it is The Mona Lisa 68(s)
- akmittal 4y agoThis comment make it seem like iPhone is suddenly desirable in 2022. iPhone has been leader since the beginning, it does take effort to stay at top but i wonder credit goes to Tim Cook for that.
- kube-system 4y agoWell, maybe from around 2010-2012 or so. In the first couple years, the iPhone was a product looking for a market that didn’t yet exist.
- dopeboy 4y agoIt takes a massive amount of effort to stay at the top. Yes there’s inertia and lock-in and walled gardens that contribute to folks staying in the apple ecosystem. But that doesn’t mean it’s easy.
- black_13 4y agoYou could move it to the US? Im just saying. To say appalachia?
- boojums 4y agoI'm not sure why this comment is dead. I certainly would prefer that West Virginia get some economic activity besides destroying their mountains for coal better left in the ground.
- vanilla_nut 4y agoI thought the same thing. The iPhone is already quite expensive. It shot up from an MSRP of around $500 to $1000+ in the last 5 years. Clearly the market is willing to pay a large sum for the iPhone, and monthly payment schemes/subscription programs take away 99% of the sticker price shock (for better or for worse). Considering people will by an iPhone almost no matter the price... why not manufacture some in the US, with minimum wage jobs and no worker exploitation, and charge $1500 a pop for 'made in the USA'?
- nottorp 4y agoThat may get some sales in the US. I doubt the Apple customers outside there would be delighted to pay 50% more for that label.
- vanilla_nut 4y agoFor sure. I wonder if there's an optimization available for a company that centralizes manufacturing for each continent, minimizing the "ship" and "plane" part of shipping costs. Imagine iPhone factories in West Virginia, Romania, and India, to start. I suppose the economics depend on how much you can spread out component manufacturing: I know TSMC is the only manufacturer even capable of making the top-of-the-line iPhone SoCs at this point, but I suspect batteries, motherboards, cameras, metal, and glass have a little more competition.
- onlyrealcuzzo 4y agoThere's not enough people. Unemployment rates are like 4%, population density is like 115 people per square mile, and workforce participation is like 60%. That's like ~2.8 per square mile you can employ. That's not even ~100,000 people in a 100 mile radius. No way you're going to attract 10% of them to work in your factory. Somewhere like Detroit might be possible - ~4.5M people, 6.1% unemployment, ~62% participation = ~170k - a lot with previous manufacturing experience. All that in a ~33 mile radius instead of ~100 mile radius...
- MangoCoffee 4y agoApple invested too much in China. I doubt they can wean off the Chinese market and labors/suppliers. the news about Apple throttled AirDrop during Chinese protests is a tell.
- est 4y agoFoxconn invested too much in China, Apple invested too much in Foxconn.
- therealdrag0 4y agoDoubting they can cold turkey is reasonable. But why can’t they wean off?
- nowherebeen 4y agoWhat Apple has learned is that they need to diversify their manufacturing risk. It’s not surprising they want to move some production to India. I have doubts they will completely move away from China though. Apple is a business, they don’t care about politics as long as it doesn’t hinder their production.
- MarkusWandel 4y agoWhat I would rather know is where the entire supply chain is. What countries contribute what percentage of the finished product? You can claim "made in X" if the final assembly is there, even if 90% of the value add is in the supply chain not located in X.
- TazeTSchnitzel 4y agoApple have the budget and the interest to investigate their supply chain and provide a good answer to this. Outside sources probably don't :/ My uninformed speculation would be that the answer is something like 90% China for each hop along the chain, but those accumulate. 0.9^n becomes small with large enough n, so depending on the viewpoint it might be majority non-China…
- mikymoothrowa 4y agoit’s no where close to 90% https://www.apple.com/supplier-responsibility/pdf/Apple-Supplier-List.pdf https://www.apple.com/supplier-responsibility/pdf/Apple-Supp...
- verdenti 4y ago
- boole1854 4y ago> My uninformed speculation would be that the answer is something like 90% China for each hop along the chain, but those accumulate. 0.9^n becomes small with large enough n, so depending on the viewpoint it might be majority non-China… If the cost allocated to China is 90% at each 'hop along the chain', then the total going to China across all hops is 90%, not 0.9^n. (This isn't like probability theory -- adding more links in the chain doesn't decrease the costs of earlier links.) In any case, I have not found more recent estimates, but in 2018 one author estimated that only 3.5% of the manufacturing cost could be allocated to China. Their competitive advantage is in final assembly, but most of the pricey components are sourced elsewhere: https://theconversation.com/we-estimate-china-only-makes-8-46-from-an-iphone-and-thats-why-trumps-trade-war-is-futile-99258 https://theconversation.com/we-estimate-china-only-makes-8-4...
- papito 4y agoWhat was unthinkable in 2020 is now thinkable in 2022. Can Russia just start a major land war in Europe, wiping out whole cities? Sounds crazy. Nnnope. "Chinese President Xi Jinping has ordered the country’s military to develop the ability to take control of Taiwan by 2027, according to CIA official David Cohen." https://www.thedefensepost.com/2022/09/21/china-seize-taiwan-us-intel/ https://www.thedefensepost.com/2022/09/21/china-seize-taiwan... Tim Cook is not an idiot. He knows that this would be a major event that would put his entire company in existential danger, and once the odds are above 1%, you are playing for keeps. Remarkably, this is just one of the factors. Xi's behavior in general has become increasingly unpredictable, but also Apple is not immune to the "Hollywood strategy" - China learns what it needs to learn, borrows all the advanced technology, and tells the other side to please abscond when the time is right. This has already happened for the US movie industry. Disney, after humiliating itself in front of the CCP for over a decade in order to make a buck, is now not welcome. China makes its own movies thank you very much. The time for phones and Teslas is coming. Tim Cook knows this. Elon Musk - not so much. That guy is oblivious, busy being a one-man moderator switchboard on Twitter and chasing down Hunter Biden conspiracies, or something.
- slaw 4y agoChina started going downhill few years after Xi took power. Musk knew it and invested in China anyway. If he was 10% as smart as media portrayed him until recently, he would build factory in Vietnam, Thailand or Mexico.
- kshacker 4y agoI do not see a problem in building in China if you are going to sell in China. Just build enough to take care of China demand, give or take a few percent, so even if China goes to war, or kicks you out, or whatever ... the rest of the world does not suffer. That way China also knows they have only so little control on you.
- bamboozled 4y agoWhat about moving it too...a country where workers are paid properly and environmental standards are highest? Ha.
- akmittal 4y agoThat means expensive product or lesser profit margin. I dont think Apple wnt either
- Qtips87 4y agoIf Apple want to exit China for geopolitical reason it should move to Vietnam. Western manufacturers have set up shops in India before and there were few successful stories and many have exit eventually. Ford for example exit India after not turning a profit for decades. When people point out India's problem it is the usual suspect like government red tapes, poor infrastructure, unreliable electric grid...etc. Some even blame India's problem on democracy, which is absurd. Germany is a democracy and is a manufacturing powerhouse. But the fundamental problem underlying all these is the average IQ of a nation. India's population average IQ is 82 and this is the fundamental reason why the workers productivity is so low. This is the elephant in the room that every manufacturer who want to set up shop in a foreign country should consider.
- Markoff 4y agoSo exist communist China for communist Vietnam, right, that's really an improvement. Only reason companies are moving from China is because of too high cost already while Vietnam, Indonesia or India are way poorer. Plus if you would read the article you would notice Vietnam is just too small with not enough labor to replace China.
- slaw 4y agoVietnam with 98 million population is too small? Vietnam is completely different than Indonesia and India. It is like smaller China before Xi took power.
- Markoff 4y agoRead the article before commenting.
- slaw 4y ago> The country has just under 100 million people, less than a 10th of China’s population. It can handle 60,000-person manufacturing sites but not places such as Zhengzhou that reach into the hundreds of thousands, he said. I disagree that country of 100 million people is not big enough for 300 thousand workers factory.
- rrgok 4y agoSomeone said something along the line of "This alone is going to be a huge driver of India's economy going forward...". I honestly feel the opposite. This will make the country more poorer. Hey, I don't know anything about economics. But if mass production (in tech) happens always in those countries and the economy moves forward, then why, on average, those people's lifestyle is not comparable to the poorest man in the west?
- sornaensis 4y agoChina has raised a billion people into a comfortable standard of living by doing exactly this. Taiwan, South Korea, and Vietnam all have developed at substantial rates via this method as well. Maybe you're thinking of countries which are based around resource extraction? Because building a ton of factories and putting people to work making gadgets for other countries is pretty well proven.
- deleted 4y ago[deleted]
- 90d 4y agoThey have a chance to improve things here, but they will just recreate the same dystopic work environment. They need bodies not change.
- ZeroGravitas 4y agoI wonder what percentage of sales they predict for India. Based on population and wealth increases, I'd guess it's a reasonable figure even at the lower bounds, which probably factors into various decisions.
- akmittal 4y agoApple iPhone sales are already growing quite good https://www.google.com/amp/s/www.livemint.com/news/iphone-sales-in-india-headed-for-another-record/amp-11664908733721.html https://www.google.com/amp/s/www.livemint.com/news/iphone-sa...
- osigurdson 4y agoChina is a great country. Just gotta get rid of Xi and the CCP.
- akmittal 4y agoMuch easier said than done
- osigurdson 4y agoIt looks like some of the Chinese have finally had enough. Watching these brave folks makes me proud to be human.
- achenatx 4y agowish the biden administration would give manufacturers a tax break to manufacture in south america. It would enrich our neighbors to the south and possibly put a dent in drug trafficking and illegal immigration. Making asia rich doesnt help us nearly as much as making south america rich.
- boringg 4y agoHmm but wouldn't that just flow into the hands of the cartels?
- duxup 4y agoIs South America a viable place to setup this kind of manufacturing? Mexico has a lot of car / parts manufacturing as far as I know but beyond that I don’t know.
- limitedmage 4y agoNokia used to have a big factory in Mexico. Brazil already makes iPhones since it’s cheaper due to their insane import tax.
- ticviking 4y agoThat seems to me like their import tax is working. I wish more countries had import taxes of this sort, they tend to push the nation to be a bit more diversified in their economy since they provide air cover for small local concerns.
- glintik 4y agoI’d like to see again “Made in USA” phone and ready to pay 10% more.
- c54 4y agoProblem is it wouldn’t be 10% more, it’d be 100% more
- Mindless2112 4y agoThere is one, but you're going to pay more than 10% more. https://puri.sm/products/librem-5-usa/ https://puri.sm/products/librem-5-usa/
- jillesvangurp 4y agoThat's the problem. It would be way more and people looking to get a bargain would haggle over that 10% (plus something) anyway. Also, Apple gets a lot of its revenue outside the US. China is actually a really big market for them. It about rivals Europe. North + South America is about 40% of the revenue for Apple. A lot of that would be from the US; but not all of it. Let's call it 30%. Made in the US just doesn't have a whole lot of appeal outside of the US and Apple has the rest of the world to worry about as well.
- saimiam 4y agoIndia's timing on "Make in India" couldn't have been more fortuitous. The Modi government started hyping Make in India in 2019, if memory serves. Nothing came off it for a while until things started moving in 2021. And now, by 2022, India seems poised to take over some manufacturing from China. Better lucky than good, I guess.
- akmittal 4y agoMake in India was hyped most in 2015-2016. It was always considered a failure. Recently government introduced PLI and DLI schemes which helped get some manufacturing rolling.
- k0dede 4y agoApple will make iphones in india with great working condition, reasonable zero-covid policy and great compensation. All the problem will be shifted away by moving the factory to India. (Smile)
- Qtips87 4y agoIn your dreams. Bharat is a shithole.
- Qtips87 4y ago
- neycoda 4y agoI wonder how many workers will sacrifice their lives to make the price of iPhones "competitive"?