Apple suppliers said to invest $1B in India to meet worldwide production needs

Posted:
in General Discussion edited September 16
Apple is reportedly on the verge of investing some $1 billion in India manufacturing assets through partners like Taiwan-based Foxconn, resurrecting rumors that the tech giant is looking to expand production capabilities beyond China.

Apple India


Citing sources familiar with Apple's plans, The Times of India reports the company and its partners will invest in the region as it seeks to keep up with product demand worldwide.

It appears that Apple's contract partners, not the iPhone maker itself, will commit the funds to new and existing projects in India. Foxconn, for example, is due to funnel funds into its production facility in Chennai, which will be tapped to produce devices for the global market. Smaller component makers will also make investments to boost regional growth, the report said.

Testing of products made in India is reportedly underway, while Apple is again "seeking clarity" on export incentives from the local government. Export and import minutiae, such as 30% local sourcing requirements, have long been a thorn in the side of Apple's India strategy, though the company appears to be making headway.

In July, Apple contractors began to export India-made iPhones to markets in Europe, a major step in diversifying its global supply chain. Those handsets were thought to originate from plants in Bengaluru operated by contractor Wistron.

According to the report, Indian IT minister Ravi Shankar Prasad recently touted Apple's expansion in the country.

"Apple has started manufacturing iPhones in India [. . .] making components and are exporting as well [. . .] Apple is on board as far as India's success story is concerned," Prasad told to press outlets.

India's media, as well as government officials like Prasad, have in the past hyped Apple's supposed interest in the country for personal or political gain, often trumpeting rumor and speculation as fact in overly optimistic forward-looking statements.

That said, there is evidence that Apple and its partner manufacturers are ramping up operations in the country. Contractor Wistron earlier this year green-lit a $340 million investment into Indian plants connected to iPhone production. Wistron was known to produce iPhone SE and iPhone 6S units for local consumption.

More recently, Apple in July stopped sales of low-priced handsets including iPhone SE, 6 Plus and 6S Plus in India, pushing customers toward iPhone 6S and higher-priced smartphones like the Foxconn-produced iPhone XR and XS.

The reported investment in India comes as Apple and other U.S. corporations face fallout from the ongoing trade war with China. For its part, Apple says it is unlikely to move production out of China despite tariffs that impact a range of devices, from HomePod to Apple Watch.

Comments

  • Reply 1 of 11
    Apple has oodles of cash being generated in each geographical region they operate in.  One can imagine that using that cash to reinvest in production in important markets.
    Obviously India is one of the largest potential market in the world and manufacturing in that country will reduce tariff pressure and reduce unit costs.
    tmay
  • Reply 2 of 11
    A necessary risk management for AAPL given the current political ideology in the US. But we'll see how successful this whole venture goes. The infrastructure difference b/n India and China is still quite marked.
  • Reply 3 of 11
    Interesting 
  • Reply 4 of 11
    Keep in mind that it says "Apple suppliers" which might have nothing to do with Apple decision whatsoever as they are different companies who also produce rival phones.
    racerhomie3
  • Reply 5 of 11
    India has bigger issues to worry about. It’s behind in the Human development index than neighboring Bangladesh(50 years old). It’s people need to use condoms more & understand that they are responsible for India’s overpopulation. These new jobs will come & go. But quality of life in India needs to improve faster. Come on people, you can do it!
  • Reply 6 of 11
    India has bigger issues to worry about. It’s behind in the Human development index than neighboring Bangladesh(50 years old). It’s people need to use condoms more & understand that they are responsible for India’s overpopulation. These new jobs will come & go. But quality of life in India needs to improve faster. Come on people, you can do it!
    You’ve literally been posting for years about how Apple needs to invest more in India, and now this, after they do so?
    ¯\(°_o)/¯ 
  • Reply 7 of 11
    India has bigger issues to worry about. It’s behind in the Human development index than neighboring Bangladesh(50 years old). It’s people need to use condoms more & understand that they are responsible for India’s overpopulation. These new jobs will come & go. But quality of life in India needs to improve faster. Come on people, you can do it!
    You’ve literally been posting for years about how Apple needs to invest more in India, and now this, after they do so?
    ¯\(°_o)/¯ 
    Investments are good. But India really needs to be better at providing better lives to its citizens.
  • Reply 8 of 11
    kevin kee said:
    Keep in mind that it says "Apple suppliers" which might have nothing to do with Apple decision whatsoever as they are different companies who also produce rival phones.
    That's unlikely considering most of those companies already have production facilities in India.  Those companies are under no pressure of tariffs like Apple so increasing their capacities in India don't really make sense.  If the rumor is true, realistically the only company it could be is Apple.  
  • Reply 9 of 11
    melgrossmelgross Posts: 31,977member
    This is all very nice. But most people aren’t aware that Trump has already begun his trade war with India, though it’s not yet being pushed too far, or being publicized heavily.
  • Reply 10 of 11
    melgrossmelgross Posts: 31,977member
    India has bigger issues to worry about. It’s behind in the Human development index than neighboring Bangladesh(50 years old). It’s people need to use condoms more & understand that they are responsible for India’s overpopulation. These new jobs will come & go. But quality of life in India needs to improve faster. Come on people, you can do it!
    What does that have to do with Apple, or for that matter, any other major company investing there?

    its an incorrect assumption that these companies have outsized influence. It’s up to the government to produce, and enforce the laws required. India is a country still mostly mired in old, outdated, and dangerous traditions. It also has extremist governments in a number of states that go their own way. The Indian government has been governed by a party for some years now that is itself an extremist Hindu party. If we think we have problems because of the current administration, and we do, just think of what a fraction of a problem it is compared to what is going on there.

    do you know that in trying to get plumbing and bathrooms installed throughout the country, in most places outside major cities, men will not use them, preferring to go outside? And in big cities near large bodies of water, particularly rivers, people still use them as toilets, while animals are there, along with women washing clothing, while people are fishing?
    racerhomie3
  • Reply 11 of 11
    India has bigger issues to worry about. It’s behind in the Human development index than neighboring Bangladesh(50 years old). It’s people need to use condoms more & understand that they are responsible for India’s overpopulation. These new jobs will come & go. But quality of life in India needs to improve faster. Come on people, you can do it!
    You’ve literally been posting for years about how Apple needs to invest more in India, and now this, after they do so?
    ¯\(°_o)/¯ 
    Investments are good. But India really needs to be better at providing better lives to its citizens.
    The hell does any of that have to do with Apple?
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