“We are pleased to manufacture the iPhone 14 in India. With its inimitable laconic style, Apple confirmed on Monday September 26 that the company’s flagship product was partially manufactured outside of China just three weeks after its launch. More precisely in Chennai, the big city in the southeast, in the state of Tamil Nadu.
iPhones have been coming from Indian factories since 2017, but this is the first time the American has taken the risk of entrusting its latest model to a local site. The producer is not unknown since it is the same as in China, the Taiwanese Foxconn. Apple plans to produce 25% of its smartphones in India by 2025, compared to just 3% today. It relies on its traditional partners Foxconn, but also Pegatron and Wistron, all from Taiwan.
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This will delight Indian Prime Minister Narendra Modi, who has made Make in India his priority. In addition, Foxconn signed with New Delhi in 2022 to build a giant chip factory, a colossal investment of nearly $20 billion. Taiwanese industrialists have also taken the opportunity to export their very questionable practices regarding labor conditions, which have led to several blockades of Foxconn and Wistron factories in recent years.
On-the-fly decoupling
The Californian group is in the process of relocating a large part of its logistics chain from China to South Asia. It plans to have almost 20% of its watches, iPads and other electronic devices manufactured in Vietnam. He is driven by his desire to find new growth areas in a saturated global smartphone market.
India is the world’s largest market, just behind China, and Vietnam’s sales have doubled since early 2022. But the apple company is also being pushed there by the growing tensions between Washington and Beijing. And the zero-Covid strategy pursued by the Chinese government has not helped matters by disrupting much of the country’s industrial apparatus.
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Symbolic of this shift and China’s difficulties, the latest World Bank forecasts, released on Tuesday September 27, suggest that Chinese growth will be lower than that of its southern neighbors for the first time in more than thirty years.
The institution expects gross domestic product to increase by just 2.8% versus 5.3% for the rest of Asia, driven by the recovery in commodity prices, of which many countries are exporters, and consumption momentum. The Chinese locomotive, which accounts for 80% of the total area, lags behind. While the World Bank expects a rebound in 2023, decoupling is underway. And we already know the beneficiaries.