Apple supply chain analyst Ming-Chi Kuo is not an obscure name in the APAC region. He is an analyst at TF International Securities, a financial services group. He gathers intelligence from his contacts in Apple’s Asian supply chain, translating the information he gleans into research notes for clients. In a groundbreaking move, Kuo predicts that Apple is going to commission its contracted manufacturers in India for the production of iPhone 17 next year. This historical development signifies the first time that the New Product Introduction (NPI) process for an iPhone model will be initiated outside of China.
Apple has 3 trusted contract manufacturers in India, namely Foxconn (Hon Hai), Pegatron, the Tata Group (Tata acquired Wistron’s production lines for a substantial USD 125 million). As these manufacturers commence the introduction process next year, it will become a testament to Apple’s efforts to diversify its supply chain and move out of China completely.
Kuo’s analysis further reveals that Apple is strategically reducing its operations in China, with a 35-45% reduction in Foxconn’s Zhengzhou and Taiyuan facilities and a 75-85% reduction in the latter by 2024. This realignment is partly driven by Luxshare’s increased iPhone order allocation and advancements in production line automation.
He also said that iPhone’s production in India, for the world, will surge to 20-25% by 2024, a significant leap from 12-14% in 2023. The Apple Inc.-Tata Group partnership has been a key milestone in Apple’s commitment to bolstering its production capacity in India.
It is pretty evident from the recent developments that India has turned out to be an important cog in the wheel for Apple’s global supply chain diversification strategy. As the tech giant strives to shift 25% of its iPhone production to India by 2025, a reduction in China’s contribution to iPhone production is nothing short of obvious.