Previously, the United States officially imposed four rounds of strict sanctions on Chinese companies on information security issues, which had a considerable impact on Huawei's development. Especially Huawei's mobile phone business, because Kirin chips have nowhere to manufacture, sales have plummeted, and revenue has plummeted. Huawei's sales have been damaged, allowing the domestic high-end mobile phone market to recover the situation of Apple's monopoly.
In addition to imposing chip sanctions on domestic companies, the United States has encouraged its own companies to reduce their dependence on China and turn to other markets, and Apple is one of them.
Apple's mobile phone sales have risen, making its foundry Foxconn even more profitable. Foxconn, as Apple's largest foundry, has always been Apple's most solid partner, after hearing that Apple transferred the industrial chain, it can be said that it is a quick action, currently to expand the business in India, it seems that in time we can indeed say goodbye to Apple.
Since 2017, Apple has pushed forward a supply chain migration plan to reduce its dependence on Chinese manufacturing. At that time, Apple moved part of the iPhone production line to India, but the main production in India is old models. Since last year, Apple has further started plans to produce the latest iPhone 14 mobile phone in India. And it is planned that by 2025, the Indian factory will undertake 25% of Apple's global production capacity, which should be why Foxconn has built a factory in India.
However, Apple's move out did not seem to be so smooth, and there were many serious accidents that caused problems with the order. Not only is the quality of Indian factory employees not good, but also requires all-round training, and a fire in India has delayed Apple's orders for a long time. In the end, in order to complete this part of the order in time, Foxconn still moved to the factory in Zhengzhou. Although Apple's factory has encountered this series of problems, Apple still insists on the plan to move out.
Foxconn, as Apple's foundry, has always relied heavily on Apple's orders. It is precisely because of Apple's order that Foxconn has developed rapidly in several years and is at the forefront of manufacturing companies.
It can be said that Foxconn and Apple are mutually successful. Apple's various products are welcomed by the public, and the orders brought to Foxconn are increasing, so Foxconn's employees in the mainland once rose to 1.3 million to ensure the production of Apple products. Foxconn also attaches great importance to Apple, according to Lei Jun, for the fire of Apple orders, Foxconn has postponed Xiaomi's orders for two months, which is enough to see how much Foxconn attaches importance to Apple.
When Foxconn began sanctions in the United States, it directly cut off the supply of Huawei OEM, which can be said to be very clear. And when Apple planned to migrate from the mainland, Foxconn was ready to take the lead in building factories in India and other places.
According to the Wall Street Journal, Foxconn's parent company Hon Hai is also considering expansion plans in India, including opening new factories and increasing the number of iPhone assemblies, and annual production is expected to increase to 20 million units.
However, Foxconn's recent sudden announcement that it will build a new iPhone assembly plant worth about $700 million in India's Silicon Valley has also been endorsed by Apple. Previously, even without considering the cost, Apple still did not transfer the entire industrial chain to China, for fear that due to the official fate, if the local official asked to stop the assembly, it would affect the entire sales.
The new assembly plant also means that Apple wants to move the supply chain to Southeast Asia, which also shows that Apple really wants to say goodbye to China.
While Apple is trying to relocate its chain from China to other countries to reduce its reliance on Chinese manufacturing, India's market and production base still have a long way to go relative to China. Apple and Foxconn seem to be ignoring an important issue, which is that the mainland market has made them.
Apple and Foxconn collided with the spark in Chinese mainland, and the two sides developed. The mainland has a complete industrial chain, high-quality labor force, world-class supply chain system, and the world's largest consumer market, which are all advantages that India cannot match.
Foxconn must always remember that the business ability of Chinese blue-collar workers has made Foxconn what it is today, and not all workers in all countries are as good as Chinese workers.
While the Indian market has great potential, it still lacks the advantage of a Chinese production base. The first is the personnel issue, with workers in India being less qualified and reluctant to work overtime. In the case of urgent orders, they still left work on time, so that the production capacity of the Indian factory has not been able to increase.
Moreover, R&D technology does not match the capabilities of employees, and Indian employees are still a long way from fully mastering technology. At present, in terms of the assembly process, the yield rate of iPhone products is barely more than half, which has a great impact on production.
Secondly, India's infrastructure and supply chain still need further construction and improvement, and the upstream and downstream configuration is incomplete, which requires a lot of time and investment. In contrast, China's infrastructure and supply chain system is quite mature and is already Apple's main supply chain base.
However, as Foxconn expands in India, Apple's dependence will gradually diminish. Foxconn has rich manufacturing experience and technology accumulation, its scale effect and supply chain management capabilities are difficult to match other enterprises, can quickly respond to customer requirements, can provide Apple with the whole process and customized services, to ensure the normal supply of products. If Foxconn's India operations expand, Apple will have more flexibility in choosing its suppliers to reduce its dependence on a single supplier.
However, Foxconn's new factory will not have an immediate impact on Apple's business. Apple's business in India is still growing slowly, and there's still a big gap compared to Chinese mainland's business. But as India gradually becomes an important hub for global manufacturing, this trend may gradually change. Apple is also aware of this and has invested heavily in India to strengthen its position in this market.
It can be said that the construction of Foxconn's new factory in India is a noteworthy change. This shows that the partnership between Apple and Foxconn is changing, and it also shows that Foxconn is looking for new markets to expand its reach.
For Apple, Foxconn's expansion in India could reduce its dependence on a single supplier and prompt Apple to look for new partners in other countries. For Foxconn, the expansion of the Indian market is also risky, and they need to establish an efficient supply chain and production system in the Indian market to succeed in this market.
For Apple, the purpose of withdrawing from China is nothing more than three points, one is to worry about the impact of the neck, worry that the industry is placed in China, it is easy to be limited in the future, if multi-regional dispersion, it can reduce this risk; The second is the influence of the US official, after all, it is a local enterprise in the United States, and it is understandable to implement it according to the strategy; Finally, there is the issue of cost, although the quality of workers in China's manufacturing industry is very high, but with the development of China's economy, wages have increased, production costs have also increased significantly, and the transfer to Indian factories has obtained cheap labor.
In any case, for Apple and Foxconn, their business has gradually become international, and their decisions and actions also need to adapt to the trend of globalization. However, the process of globalization has not been smooth. On a global scale, changes in political, economic, social and cultural factors can have a significant impact on businesses.
For example, in recent years, the rise of global trade protectionism has put extreme pressure on globalization. Official U.S. protectionist measures have already affected many companies, including Huawei and Foxconn. Due to the US official sanctions against Huawei, Foxconn had to stop manufacturing for Huawei, which had a big impact on Foxconn's business.
Similarly, the official U.S. crackdown on Chinese manufacturing has had an impact on Apple and Foxconn's business in China.
In addition, human costs are also a factor affecting globalization. China's rising labor costs in recent years have forced Foxconn to consider the possibility of moving out of China. Although India's labor costs are relatively low, India's production base and supply chain still need to be further improved, and Foxconn's business in India is also facing certain challenges.
In addition, aspects such as environmental protection and labour issues may also have an impact on the development of globalization. With the increase of global environmental awareness, enterprises need to take more environmental responsibility, but also need to better protect the rights and interests of employees. These factors need to be fully considered by enterprises in the process of globalization and take corresponding measures.
The construction of Foxconn's new factory in India is an important change that shows that the relationship between Apple and Foxconn and China is changing dramatically. However, in the process of globalization, the challenges that companies need to face are also increasing. Enterprises need to fully consider various factors and formulate better strategies and plans in order to obtain better development opportunities in the global competition.
For the consumer market, China's Apple mobile phone market has always been very strong, once Apple transfers the entire industrial chain abroad, then the corresponding convenience conditions will no longer be. In particular, the mainland's inspection of imported goods is very strict, and when there is a problem that the goods cannot keep up with sales, it is also something that Apple needs to face on its own.
For Foxconn's relocation to India, CCTV once made the following evaluation, a company should have multi-directional development, rather than just focusing on one place, blindly relying on Apple is not a long-term solution for enterprise development. If you can't cultivate your own unique abilities, it's only a matter of time before you are eliminated by the market.
Our country welcomes companies that cooperate in China and appreciates that they provide jobs for Chinese people, but there is no need to impose retention on those companies that withdraw from China.
Similarly, in addition to Foxconn, there are some other domestic enterprises in Apple's upstream and downstream supply chain, to be mentally prepared, do not put all the eggs in one basket, can strengthen cooperation with local brands, multi-directional development, improve production efficiency, reduce the excessive dependence of enterprises with any enterprise.
Foxconn's industrial transfer will definitely have an impact on China's manufacturing industry, but we must know that this is a step that the development of the country's manufacturing industry must go through. The country is constantly developing, science and technology, economic level has reached a certain level, relying on low-cost labor mainly manufacturing industry is also in urgent need of transformation.
At present, many domestic companies have begun to voluntarily abandon Apple OEM, but choose to cooperate with the domestic new energy industry. If China's manufacturing industry wants to develop further, it must master the middle and upstream stages of the industrial chain, accelerate industrial upgrading, and use technology to control the right to speak.
A series of actions by Apple and Foxconn will certainly have an impact on the Chinese market, and the cooperation of the three parties has reached a win-win relationship, and it is unknown whether Apple and Foxconn can get satisfactory results after insisting on change. After all, the Chinese market, if there is no Apple, can continue, and if Apple really loses the Chinese mobile phone market, will there be earth-shaking changes? We'll see