Whereas India’s Apple story is nothing wanting wonderful, it nonetheless hasn’t reached the excessive that China achieved in its preliminary related timeframe, as defined by journalist Patrick McGee in his newest e-book.
McGee was Monetary Instances’ principal Apple reporter from 2019 to 2023, whose newest e-book ‘Apple In China’, printed by Simon & Schuster, particulars how the corporate turned one of many largest on the earth and the way it had tied its fortunes with Beijing.
Apple’s transfer away from China was spurred by the Shanghai lockdown of 2022, which proved a significant catalyst for change, mentioned McGee. The journalist quoted a former government who mentioned: “China went from being a dependable provider to a very unreliable provider.”
In the meantime, Tim Cook dinner had said in a memo in October 2018 that India was poised for a “China-like trajectory”, however within the 5 years since, the push was nonetheless tepid. Cupertino was cautious and New Delhi was not solely keen to be as welcoming as Beijing had been a decade earlier. The Indian authorities wished international firms to supply 30 per cent of the elements domestically.
“When the foundations had been relaxed in 2017, Apple suppliers started assembling some iPhones in India – with Taiwanese accomplice Wistron – a transfer that allowed Apple to keep away from hefty tariffs. That made the iPhone extra reasonably priced to a rising center class,” mentioned McGee in his e-book. He identified that an internet Apple Retailer solely opened in 2020, and the primary bodily retailer three extra years later – which was 15 years after the primary retailer had opened in China.
India started with making entry-level iPhone SE fashions and moved on to supply flagship fashions. By 2023, there was no lag between distributions from China and from India, and made-in-India iPhones had been obtainable on the identical day. By 2024, India was making the Professional fashions.
Nevertheless, McGee mentioned, India’s tempo of development was not comparable with China’s even a decade later. “From 2016 to 2023, iPhone manufacturing in India grew from zero to round 15 million models, accounting for 7 p.c of world shipments. China, between 2006 and 2013, ramped manufacturing from zero to 153 million models. So, at greatest, India is taking up iPhone orders at one-tenth the speed China did a decade earlier,” mentioned McGee in his e-book.
Even so, right here is the larger drawback – the Apple operations in India are all FATP, which interprets to last meeting, take a look at and pack out. It’s a labour-intensive course of. Parts are flown in from China, assembled by the Taiwanese firms Wistron and Foxconn.
McGee quoted a producing design engineer who jokingly mentioned made-in-India iPhones are “assembled in China, disassembled there, after which despatched to China for reassembly”.
The journalist mentioned that Apple intends India to turn out to be totally succesful in each respect however that too is more likely to take one other 5-10 years. India operations are nonetheless within the early levels of increase capability.
McGee quoted a former senior Apple engineer who mentioned the tempo of growth hasn’t been fast. Having iPhone meeting in each China and India, depending on the identical provide chain, provides extra problems than resilience, he mentioned.
The decrease labour prices of India will get offset by the added logistics of sending freight from China.
