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Apple Considers Shifting Some iPad Production to India

According to sources close to the Indian Government, India is looking forward to bringing some of Apple’s iPad manufacturers from China to the country. The tech giant is understood to be in continuous talks with officials. There are no firm plans, but if the endeavor is successful, Apple’s footprint in the country will grow.

Apple revealed earlier this year that production of its flagship iPhone 14 had commenced in southern India. For several years, the tech giant has been manufacturing earlier generations of the iPhone in the nation.

Apple’s plans to diversify more of its supply chain away from China come in the wake of nationwide protests over the last two weeks in response to Beijing’s tough zero-Covid policy. Apple warned in early November that iPhone shipments would be delayed due to Chinese lockdowns, and experts have reduced iPhone predictions for the critical holiday quarter.

The Wall Street Journal claimed over the weekend that Apple is aggressively looking to relocate production away from China and into other Asian countries such as India and Vietnam.

However, sources warn that a scarcity of highly qualified labor and persons with experience creating highly complicated gadgets such as the iPad could stymie these efforts in India. The global policy context does not help either, with tensions between India and China rising.

Loop Ventures’ Gene Munster estimates that 10% of iPhones are made in India, although he expects production to grow slowly.

“I think in five years, 35% will be manufactured in India. I think Apple will add iPhone production to other countries outside of India and China in the next five years. Perhaps Vietnam, Malaysia, and the USA,” said Munster.

However, Foxconn, an Apple supplier, says it will ‘gradually’ restore production capacity at its large facility in central China, which has been impacted by Covid-19 restrictions and worker protests since October.

The ‘epidemic crisis’ at the complex, known as iPhone City and ordinarily home to hundreds of thousands of workers, has been brought under control, according to a statement issued by the Taiwanese contract manufacturer.

“We have also started to recruit new employees and are gradually moving toward the direction of restoring production capacity to normal,” it said.

Foxconn did not disclose any additional information. Its executives stated that full manufacturing would restart between late December and early January.

According to Daniel Ives, an analyst at Wedbush Securities, continuing supply issues at Foxconn’s site in Zhengzhou were costing Apple nearly $1 billion per week in delayed iPhone sales. He predicts that Apple will be short between 10 and 15 million iPhones over the crucial holiday selling season.

The problems began in October when employees departed the site due to worries about working conditions and food shortages. In order to entice workers to return, bonuses were offered.

However, protests erupted last month when freshly hired employees claimed management had broken their promises. Workers fought with security guards before the corporation finally offered them money to quit and go.

Analysts believe that the manufacturing problems at iPhone City may hasten Apple’s supply chain diversification away from China.

According to The Wall Street Journal, Apple has advanced preparations to relocate part of its production outside of China in recent weeks. It was apparently telling suppliers to plan more actively for Apple (AAPL) product assembly in other parts of Asia, including India and Vietnam.

If Apple proceeds aggressively, more than half of iPhone manufacture might come from India and Vietnam by the fiscal year 2025/2026, up from a single-digit proportion now, added Ives.

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