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I'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

I'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 ago
  As of next year, India will be the most populous country in the world.
  - peanuty1 4y ago
    India probably has been for some time now that we know China has been overestimating its population.
- deltree7 4y ago
  India 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 ago
    Sorry, 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?
    - lotsofpulp 4y ago
      I feel like a rough measure would be to see the proportion of anything that is not clothing that has “Made in India” written on it in one’s home, compared to “Made in China”.
    - jsnell 4y ago
      It seems fair to assume that actual output and manufacturing capability are closely correlated (there's a limit to how much unused capacity can get built). Here's the manufacturing output by country (data from World Bank): https://data.worldbank.org/indicator/NV.IND.MANF.CD?most_recent_value_desc=true https://data.worldbank.org/indicator/NV.IND.MANF.CD?most_rec... China is at about $5 trillion, India about $450 billion. So it's not 5%, but we are still talking of an order of magnitude.
      - mikymoothrowa 4y ago
        This is plain circular reasoning. You’re complaining that india doesn’t have the manufacturing capability by pointing to the fact that stuff is not manufactured in India, in a thread that talks about manufacturing moving to India. You realistically don’t have a way to measure capability.
        jsnell 4y ago
        First, I'm not complaining about anything. I do not give a fuck about whether India manufactures stuff or not. But there was a question about a number, I provided an answer for how it could be derived. You're welcome! I disagree with your objection. Actual current output is a great proxy for actual current manufacturing capability, assuming even a tiny bit of rationality. If the two are not linked like you imply - and in fact India already has as much capacity as China - then somebody built 10x more factories than they needed, and lost unimaginable amounts of money doing so. Is that what you're suggesting happened? Now, the claim is not that the factories, supply chains, trained workforce, etc could not eventually scale to the same size in India as in China. But somebody actually needs to do that work. Until it is done, the capability possibly does not in exist.
  - akmittal 4y ago
    > 2x expensive That's not even close. Samsung,MI,Oppo and Vivo make almost all phones for India in India. If it was this expensive they will never make India
    - deltree7 4y ago
      Yeah, compare Apple's margins vs all of the margins that you mentioned
NavinF 4y ago
India has a lot of bureaucracy and protectionism. I also don't think they have any equivalent to China's special economic zones (free market economies where the usual rules don't apply) such as Shenzhen (Chinese Silicon Valley)
- harryVic 4y ago
  India has special economic zones https://en.wikipedia.org/wiki/List_of_special_economic_zones_in_India https://en.wikipedia.org/wiki/List_of_special_economic_zones...
  - NavinF 4y ago
    Huh I thought I looked this up earlier, but I guess I was mistaken. Are these zones similar to China's? I see lots of tiny zones on that list that are focused on manufacturing just one product rather than huge cities that make everything.
    - mikymoothrowa 4y ago
      India is quite liberal even outside of SEZ compared to China. These SEZs have considerably less bureaucracy. They have power/water connections handled already and a single-window system for approvals. China also has plenty of SEZs
    - unmole 4y ago
      > Are these zones similar to China's? They are not even remotely comparable to China's. There are some SEZ's that made up of just a couple of buildings. And they aren't limited to manufacturing, it's common for multinational companies to run their R&D out of them. Source: Worked in a Bangalore SEZ for a large Chinese telecom company.
- mikymoothrowa 4y ago
  India has had SEZs for decades at this point. https://en.wikipedia.org/wiki/List_of_special_economic_zones_in_India https://en.wikipedia.org/wiki/List_of_special_economic_zones...
beautifulfreak 4y ago
Asymco once mentioned that Apple designs and builds all the tooling.
mikymoothrowa 4y ago
> they would still prefer to move less that 50% of their capacity there It is not Apple saying this. So, this is some Analyst doing a linear regression. So we can't read too much into this. It could be possible that India starts manufacturing 80% of iPhones. Or It could be less than the claimed 45% too. Also, if there's no reason for Foxconn to dismantle existing manufacturing facilities all at once.
- threatofrain 4y ago
  > So, this is some Analyst doing a linear regression. I'd note that Ming-chi Kuo is a very well known analyst.
  - twoodfin 4y ago
    He’s also known for providing, as the Apple rumor mill goes, extremely accurate information on their supply chain, particularly for iPhones.
seunosewa 4y ago
India has serious regulatory issues. Their govt is very interventionist too. Production cost is probably higher than China.
- LightG 4y ago
  I have serious reservations about India also ... but even if what you say is true (about production cost), isn't it very telling that companies are willing to move to higher production cost enviroments? It's the price of relative independence and potentially less human rights issues. It's simple isn't it: want less of a sh!t world, pay a price which doesn't exclude these externalities.
spaceman_2020 4y ago
India, being a democracy, means that governments have to give in to demands of voter groups. The two largest voter groups are farmers and low wage labor. This has ensured that acquiring land for large scale projects or changing labor laws carries massive political risk. Changes to India’s farm laws now seem next to impossible. I doubt India will have a more popular government than it has today. Yet, it had to cave in and withdraw a farm law reform bill. If even this government couldn’t pull it off, there’s little chance future governments will do any better.
- mikymoothrowa 4y ago
  > This has ensured that acquiring land for large scale projects … a political risk You’re confusing land acquisition issues for road/rail projects where a very specific parcel of land is required with land acquisition for factories. Indian States are some of the largest land owners and there are so many notified SEZs in several Indian states.
- FollowingTheDao 4y ago
  >India, being a democracy, means that governments have to give in to demands of voter groups Love how everyone is throwing around the word "democracy" in this thread like saying it makes hot true and that it has some specific meaning. The only reason Apple is moving there is because it is NOT a democracy. 'Electoral autocracy': The downgrading of India's democracy https://www.bbc.com/news/world-asia-india-56393944 https://www.bbc.com/news/world-asia-india-56393944
  - spaceman_2020 4y ago
    Propaganda. The government of my state is led by a party that came into existence less than a decade ago. Every election has literally hundreds of candidates from hundreds of parties competing. I can and have criticized the government on online and offline mediums Sure, there is pushback from government supporters, but that doesn’t mean there is no democracy. As it is practiced, democracy is thriving in India.
    - 4y ago
fnordpiglet 4y ago
Why put all your eggs in one basket? If they can afford to diversify their risk to local markets by having multiple sources they can play sourcing regions off each other. By being so dependent on China apple exposes itself to extortion. That works everywhere, China isn’t uniquely malevolent despite views to the contrary. Given the opportunity to expropriate a foreigner almost any country will leverage that opportunity.
dartharva 4y ago
India might have been on a steady path of liberalization since the 90s, but it is still fundamentally a big-government country. There is a ridiculous amount of red tape every business has to go through to operate from and in India, and when it comes to tech regulation it tends to be just as trigger-happy to impose abrupt disruptive orders on businesses as the EU, if not more. India gets all this investment because it gets fancied as the next best alternative to China (in cheap labor), not because it is convenient or conducive to foreign players. India's ease of doing business is rather horrible in today's standards.
ceejayoz 4y ago
Going all-in on any individual location has risks. At Apple's scale, even 25% in four countries means enormous efficiencies of scale in each, but if one country has a coup or goes to war with the US, it's not as disastrous.

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 ago
As of next year, India will be the most populous country in the world.
- peanuty1 4y ago
  India probably has been for some time now that we know China has been overestimating its population.
deltree7 4y ago
India 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 ago
  Sorry, 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?
  - lotsofpulp 4y ago
    I feel like a rough measure would be to see the proportion of anything that is not clothing that has “Made in India” written on it in one’s home, compared to “Made in China”.
  - jsnell 4y ago
    It seems fair to assume that actual output and manufacturing capability are closely correlated (there's a limit to how much unused capacity can get built). Here's the manufacturing output by country (data from World Bank): https://data.worldbank.org/indicator/NV.IND.MANF.CD?most_recent_value_desc=true https://data.worldbank.org/indicator/NV.IND.MANF.CD?most_rec... China is at about $5 trillion, India about $450 billion. So it's not 5%, but we are still talking of an order of magnitude.
    - mikymoothrowa 4y ago
      This is plain circular reasoning. You’re complaining that india doesn’t have the manufacturing capability by pointing to the fact that stuff is not manufactured in India, in a thread that talks about manufacturing moving to India. You realistically don’t have a way to measure capability.
      - jsnell 4y ago
        First, I'm not complaining about anything. I do not give a fuck about whether India manufactures stuff or not. But there was a question about a number, I provided an answer for how it could be derived. You're welcome! I disagree with your objection. Actual current output is a great proxy for actual current manufacturing capability, assuming even a tiny bit of rationality. If the two are not linked like you imply - and in fact India already has as much capacity as China - then somebody built 10x more factories than they needed, and lost unimaginable amounts of money doing so. Is that what you're suggesting happened? Now, the claim is not that the factories, supply chains, trained workforce, etc could not eventually scale to the same size in India as in China. But somebody actually needs to do that work. Until it is done, the capability possibly does not in exist.
- akmittal 4y ago
  > 2x expensive That's not even close. Samsung,MI,Oppo and Vivo make almost all phones for India in India. If it was this expensive they will never make India
  - deltree7 4y ago
    Yeah, compare Apple's margins vs all of the margins that you mentioned

NavinF 4y ago

India has a lot of bureaucracy and protectionism. I also don't think they have any equivalent to China's special economic zones (free market economies where the usual rules don't apply) such as Shenzhen (Chinese Silicon Valley)

harryVic 4y ago
India has special economic zones https://en.wikipedia.org/wiki/List_of_special_economic_zones_in_India https://en.wikipedia.org/wiki/List_of_special_economic_zones...
- NavinF 4y ago
  Huh I thought I looked this up earlier, but I guess I was mistaken. Are these zones similar to China's? I see lots of tiny zones on that list that are focused on manufacturing just one product rather than huge cities that make everything.
  - mikymoothrowa 4y ago
    India is quite liberal even outside of SEZ compared to China. These SEZs have considerably less bureaucracy. They have power/water connections handled already and a single-window system for approvals. China also has plenty of SEZs
  - unmole 4y ago
    > Are these zones similar to China's? They are not even remotely comparable to China's. There are some SEZ's that made up of just a couple of buildings. And they aren't limited to manufacturing, it's common for multinational companies to run their R&D out of them. Source: Worked in a Bangalore SEZ for a large Chinese telecom company.
mikymoothrowa 4y ago
India has had SEZs for decades at this point. https://en.wikipedia.org/wiki/List_of_special_economic_zones_in_India https://en.wikipedia.org/wiki/List_of_special_economic_zones...

beautifulfreak 4y ago

Asymco once mentioned that Apple designs and builds all the tooling.

mikymoothrowa 4y ago

> they would still prefer to move less that 50% of their capacity there It is not Apple saying this. So, this is some Analyst doing a linear regression. So we can't read too much into this. It could be possible that India starts manufacturing 80% of iPhones. Or It could be less than the claimed 45% too. Also, if there's no reason for Foxconn to dismantle existing manufacturing facilities all at once.

threatofrain 4y ago
> So, this is some Analyst doing a linear regression. I'd note that Ming-chi Kuo is a very well known analyst.
- twoodfin 4y ago
  He’s also known for providing, as the Apple rumor mill goes, extremely accurate information on their supply chain, particularly for iPhones.

seunosewa 4y ago

India has serious regulatory issues. Their govt is very interventionist too. Production cost is probably higher than China.

LightG 4y ago
I have serious reservations about India also ... but even if what you say is true (about production cost), isn't it very telling that companies are willing to move to higher production cost enviroments? It's the price of relative independence and potentially less human rights issues. It's simple isn't it: want less of a sh!t world, pay a price which doesn't exclude these externalities.

spaceman_2020 4y ago

India, being a democracy, means that governments have to give in to demands of voter groups. The two largest voter groups are farmers and low wage labor. This has ensured that acquiring land for large scale projects or changing labor laws carries massive political risk. Changes to India’s farm laws now seem next to impossible. I doubt India will have a more popular government than it has today. Yet, it had to cave in and withdraw a farm law reform bill. If even this government couldn’t pull it off, there’s little chance future governments will do any better.

mikymoothrowa 4y ago
> This has ensured that acquiring land for large scale projects … a political risk You’re confusing land acquisition issues for road/rail projects where a very specific parcel of land is required with land acquisition for factories. Indian States are some of the largest land owners and there are so many notified SEZs in several Indian states.
FollowingTheDao 4y ago
>India, being a democracy, means that governments have to give in to demands of voter groups Love how everyone is throwing around the word "democracy" in this thread like saying it makes hot true and that it has some specific meaning. The only reason Apple is moving there is because it is NOT a democracy. 'Electoral autocracy': The downgrading of India's democracy https://www.bbc.com/news/world-asia-india-56393944 https://www.bbc.com/news/world-asia-india-56393944
- spaceman_2020 4y ago
  Propaganda. The government of my state is led by a party that came into existence less than a decade ago. Every election has literally hundreds of candidates from hundreds of parties competing. I can and have criticized the government on online and offline mediums Sure, there is pushback from government supporters, but that doesn’t mean there is no democracy. As it is practiced, democracy is thriving in India.
  - 4y ago

fnordpiglet 4y ago

Why put all your eggs in one basket? If they can afford to diversify their risk to local markets by having multiple sources they can play sourcing regions off each other. By being so dependent on China apple exposes itself to extortion. That works everywhere, China isn’t uniquely malevolent despite views to the contrary. Given the opportunity to expropriate a foreigner almost any country will leverage that opportunity.

dartharva 4y ago

India might have been on a steady path of liberalization since the 90s, but it is still fundamentally a big-government country. There is a ridiculous amount of red tape every business has to go through to operate from and in India, and when it comes to tech regulation it tends to be just as trigger-happy to impose abrupt disruptive orders on businesses as the EU, if not more. India gets all this investment because it gets fancied as the next best alternative to China (in cheap labor), not because it is convenient or conducive to foreign players. India's ease of doing business is rather horrible in today's standards.

ceejayoz 4y ago

Going all-in on any individual location has risks. At Apple's scale, even 25% in four countries means enormous efficiencies of scale in each, but if one country has a coup or goes to war with the US, it's not as disastrous.