In an effort to reduce reliance on China, American tech giant Apple plans to manufacture the new iPhone 16e in India.
Apple announced the release of the iPhone 16 series on Wednesday, February 19. According to the Indian newspaper “The Economic Times,” this phone will be manufactured in India. “The Indian Business Daily” further reported that all five iPhone 16 models, including the top-tier version, will be produced in India.
While Apple develops and designs its products in-house, its manufacturing activities are outsourced. For many years, the majority of iPhones for the US market have been produced in China. However, disruptions in the supply chain during the COVID-19 pandemic led to product shortages, prompting Apple to accelerate its “China+N” diversified production strategy.
Apple’s main supplier, Foxconn (the parent company of Hon Hai Precision Industry), has expanded its iPhone assembly plant in India. Additionally, iPhone sales in the Indian market have seen significant growth, with Apple opening its first flagship stores in New Delhi and Mumbai in 2023.
A forecast indicates that by 2027, the share of iPhones produced in India will increase from the current around 15% to 25%.
The assembly of economical models like the iPhone 16e and SE is relatively simple because they reuse many components from previous models. The 16e may be assembled on the same production line as the iPhone 14 released in 2022, making India a crucial production center for Apple.
On the other hand, uncertainties brought by President Trump’s tariff policies have made diversification of production bases even more crucial.
“Nikkei Asia” cited a source within Apple mentioning that under the Trump administration, it is unpredictable which countries will be exempt from tariff impacts.
If India continues its trade protectionism policies, it could face the risk of higher tariffs from the US.
However, a senior executive at Apple stated that compared to China, there would be greater negotiation opportunities with the US regarding India.
Furthermore, the diplomatic relations between China and India are also a factor pushing Apple to diversify its global supply chain. The UK’s “Financial Times” previously reported that Beijing recently blocked some Chinese tech workers from entering India in an effort to keep crucial technology within its own borders.
A study in 2023 found that the majority of Apple’s 187 key suppliers have factories in China. Local production of electronic components in India will be Apple’s next significant step.
India has been nurturing its domestic manufacturing industry. This month, the Indian government drastically reduced tariffs on electronic components and lithium-ion battery equipment, aiming to increase the import of intermediate goods needed for smartphones and electric vehicles.