Apple reportedly pushes Foxconn to invest $1B to expand iPhone manufacturing in India
Taiwanese contract manufacturer Foxconn is reportedly preparing to infuse up to $1 billion into a production facility in India, an investment supposedly made at the behest of Apple.
Citing sources familiar with the matter, Reuters reports Apple is quietly pushing supply partners to expand beyond China amid political tensions and the coronavirus pandemic.
"There's a strong request from Apple to its clients to move part of the iPhone production out of China," one source told the publication.
Foxconn reportedly plans to expand operations at its Sriperumbur plant, which is currently responsible for iPhone XR production. Over the next three years, Foxconn will add models to the facility's assembly list, sources said.
The up to $1 billion infusion will result in some 6,000 jobs, according to the report.
Apple is once again working to diversify its supply chain as the U.S. and China trade war continues. Plans to move portions of the complex system of manufacturers and assemblers out of China have been in the works for years, some reports claim, though Apple's partners only recently began moving toward that goal.
With the world's second-largest smartphone market, India is a juicy target for Apple. Currently, iPhone accounts for approximately 1% of the country's smartphone market, but dominates the ultra-premium segment with an estimated 63% share. Building handsets locally will drive down costs and bypass certain tariffs, making iPhone a more attractive option for Indian buyers.
India has been courting tech companies to enter the country with tax incentives and other stimulus plans, though government promises have only recently borne fruit.
Citing sources familiar with the matter, Reuters reports Apple is quietly pushing supply partners to expand beyond China amid political tensions and the coronavirus pandemic.
"There's a strong request from Apple to its clients to move part of the iPhone production out of China," one source told the publication.
Foxconn reportedly plans to expand operations at its Sriperumbur plant, which is currently responsible for iPhone XR production. Over the next three years, Foxconn will add models to the facility's assembly list, sources said.
The up to $1 billion infusion will result in some 6,000 jobs, according to the report.
Apple is once again working to diversify its supply chain as the U.S. and China trade war continues. Plans to move portions of the complex system of manufacturers and assemblers out of China have been in the works for years, some reports claim, though Apple's partners only recently began moving toward that goal.
With the world's second-largest smartphone market, India is a juicy target for Apple. Currently, iPhone accounts for approximately 1% of the country's smartphone market, but dominates the ultra-premium segment with an estimated 63% share. Building handsets locally will drive down costs and bypass certain tariffs, making iPhone a more attractive option for Indian buyers.
India has been courting tech companies to enter the country with tax incentives and other stimulus plans, though government promises have only recently borne fruit.
Comments
As Elon Musk has learned with Tesla, automation technologies have limits when it comes to quality of manufacture. In some circumstances hand assembly will ensure a higher quality build than is possible with robots.
BTW, very pleased to see that Apple has made this move. Would like to see more.
I am from India and i agree with @JWSC and @Avs_Htx on this. You SHOULD NOT apply US living standards to India when you evaluate a job opportunity in India. By Indian standards, these are decent paying jobs for those who get it. This is NOT slavery. Slavery by Indian standards is about getting paid 20 cents per hour of work. $2 per hour gives a decent living for the people who are desperate to get a job.
Yes, unemployment rate is very high, so people do not have much choice here in India. And right wing politics taking center stage also does NOT help the cause. Regarding China, I think Tim Cook has already answered that question few times. Cheap labor is NOT the PRIMARY criteria for Apple to move to China. The manufacturing ecosystem is the main reason why Apple is dependent on China. "Skilled labor" at "cheap enough cost" at "high volume" is another aspect why Apple is dependent on China. If ANY country can provide a better deal than China in ALL of those aspects, yes apple will significantly reduce their dependency on China.
Yeah, right. My youngest son is a plant manager at a food processing facility (condiments, sauces, salad dressings). They pay between $15-$20/hr. When the stimulus checks came out he started having attendance problems. Seems more than a few preferred to sit on their asses at home until their stimulus checks ran out. Then they came back to work. The American work ethic in full view.
Apple needs to think supporting the US economy and stop being selfish, thinking only profit wise.
While I agree with your main point, in this case it may simply have not been the stimulus check but that they valued their lives more than the $15-$20/Hr. The food industry jobs have been more dangerous than front line healthcare caring for Covid patients -- because there at least they (mostly) took precautions.
That's because most manufacturing is done in the countries that do it best and cheapest. If and when they move production to countries who do not do it best and cheapest you will see either: margins shrink and/or prices go up. So, why would they move? That would be somewhere between dumb and stupid.