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Will Foxconn be replaced by Indian Tata? Tata assembles 85% of Apple's mobile phone parts from China?

author:Jianghu Finance
Will Foxconn be replaced by Indian Tata? Tata assembles 85% of Apple's mobile phone parts from China?

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Apple is recognized as one of the world's great technology companies, China is Apple's largest overseas consumer market, and has always been the location of Apple's global final assembly line.

However, in the past year, Apple has not only emptied more than 300 billion production capacity in the mainland, but also kicked the original 13 Chinese suppliers out of the Apple industry chain.

Will Foxconn be replaced by Indian Tata? Tata assembles 85% of Apple's mobile phone parts from China?

So why does Apple insist on going its own way, knowing the consumption potential of the mainland market? Is it Cook's intention or forced to kick Chinese suppliers out of the Apple industry chain? Foreign media commented on this, leaving China, Apple's big trouble is still ahead.

Will Foxconn be replaced by Indian Tata? Tata assembles 85% of Apple's mobile phone parts from China?

Decoupling or risk control?

Since the United States imposed a curb on mainland high technology, Apple has realized that it cannot concentrate its production capacity too much on the mainland.

Will Foxconn be replaced by Indian Tata? Tata assembles 85% of Apple's mobile phone parts from China?

Apple's current market value is $2.8 trillion, about 20 trillion yuan, which is naturally inseparable from the contribution of the Chinese market.

Data shows that Apple mobile phones accounted for 23.7% of China's smartphone sales in the fourth quarter of 2022, making it Apple's largest overseas sales market.

This is just mobile phones, excluding Apple computers, tablets, smart watches and other related products.

Will Foxconn be replaced by Indian Tata? Tata assembles 85% of Apple's mobile phone parts from China?

It is no exaggeration to say that Apple has maintained the throne of the world's largest market capitalization over the years, mainly relying on the support of the Chinese market.

Relying on the demographic dividend of the Chinese market, from the production side and the consumption side, have given Apple huge profit margins, when Cook first took over Apple, the Chinese market accounted for less than 5% of Apple's global proportion, and the market value was only about $14 million.

Will Foxconn be replaced by Indian Tata? Tata assembles 85% of Apple's mobile phone parts from China?

Apple's profit margin has remained between 30% and 50%, which is rare!

The reason?

The general manufacturing industry chain includes seven parts: raw material procurement, product design, warehousing and transportation, manufacturing and processing, order processing, wholesale operation and terminal retail.

Apple has mastered the core of other industrial chains except manufacturing and processing, and our processing and manufacturing are the lowest profit.

So Apple's profit margins are high.

For the selection of industry chain suppliers, Apple will eliminate a number of unqualified suppliers every other cycle.

With the implementation of the United States' "decoupling and broken chain", the sanctions and restrictions on Huawei have also made Apple realize the danger of putting most of its production capacity in China.

Will Foxconn be replaced by Indian Tata? Tata assembles 85% of Apple's mobile phone parts from China?

As Apple accelerates its shift to Vietnam and India, Apple's dependence on China's production is also decreasing.

In particular, the departure of 300 billion Foxconn General Assembly has caused 13 Apple suppliers in the mainland to be removed from the layout of the apple industry chain.

Where do these companies in the apple industry chain go?

Will Foxconn be replaced by Indian Tata? Tata assembles 85% of Apple's mobile phone parts from China?

Where do the 13 suppliers go?

Some American media said that moving out of China and kicking out Chinese suppliers, Apple's trouble may be later.

As you can see from the above, Apple's market value soared from its arrival in the mainland, so moving out, does it mean that Apple will slowly lose the Chinese market?

For Apple, there are concerns, after all, the mainland accounts for almost a quarter of Apple's revenue.

But in fact, for Chinese companies that have been kicked out of the industry, it may bring labor pain in the short term, but the mainland's smartphones are developing rapidly.

Will Foxconn be replaced by Indian Tata? Tata assembles 85% of Apple's mobile phone parts from China?

In terms of global smartphone share, in addition to Apple and Samsung, the top five are all mainland companies, Xiaomi, OPPO, Huawei, and there are more Chinese mobile phone manufacturers in the top ten.

Therefore, even if these companies are removed from the Apple industry chain, there are still a large number of mobile phone manufacturers in our country who are in demand, just changing owners.

Since Apple moved its assembly line to India, naturally these 13 suppliers were also replaced by local Indian companies.

Apple's move to India is optimistic about India's demographic dividend, but the number of people is not necessarily a demographic dividend, or even a trap.

Will Foxconn be replaced by Indian Tata? Tata assembles 85% of Apple's mobile phone parts from China?

Some analysts said that Apple is "making a big deal", and big trouble may be still ahead.

India, known as the grave of multinational companies, is not something you can walk if you want to, including Xiaomi and Vodafone in the UK.

Because of the caste system, the motivation of Indian workers is very low, and they do not have the spirit of Chinese people to endure hardships and stand hard work.

India's workers are generally of low quality and low efficiency, and data show that the defective rate of mobile phone cases produced in India has reached more than 50%, which is surprising.

Will Foxconn be replaced by Indian Tata? Tata assembles 85% of Apple's mobile phone parts from China?

In addition, India's business environment is not good, especially in India land acquisition is very difficult, local officials want to build dams, will be blocked by local people, let alone foreign capital to build factories.

Apple will also encounter problems encountered by other multinational companies.

Will Foxconn be replaced by Indian Tata? Tata assembles 85% of Apple's mobile phone parts from China?

Apple's trouble came quickly

Of course, Apple also knows the trouble of moving to India, and also knows the importance of the Chinese market, so it visited China not long ago.

The mainland's national strength is increasing, and people's wages are also rising, so Apple has also begun to relocate factories in the mainland to Southeast Asia or India.

Will Foxconn be replaced by Indian Tata? Tata assembles 85% of Apple's mobile phone parts from China?

In particular, Foxconn's move has become the fuse for Apple's accelerated withdrawal.

In May, Apple CEO Tim Cook met with Indian Prime Minister Modi, which actually indicates that Apple will increase its weight in the Indian market and will achieve the second 10-year glory of Apple's overseas market in India.

But the reality may be beyond imagination.

Apple is optimistic about India's population, but India's per capita income is too low, and more than 50% of India's population still lives in rural areas.

Consumption power will not change much in the next many years, so Apple's rash move to the Chinese market is really not small.

Will Foxconn be replaced by Indian Tata? Tata assembles 85% of Apple's mobile phone parts from China?

In addition, India's largest company, Land Rover manufacturer Tata Group, is India's largest apple assembly company, but in fact, only 15% of its components come from India, and most of the rest comes from China.

Foxconn has the intention to follow Apple, but Gou may shed tears in the Indian market, and it is very likely to be replaced by India's Tata.

We don't have to be too entangled in Apple's departure, we have our own mobile phone manufacturers, these suppliers should also learn from Apple, don't put eggs in one basket, get rid of dependence on a single enterprise.

Will Foxconn be replaced by Indian Tata? Tata assembles 85% of Apple's mobile phone parts from China?

In addition, we should shift from low-end manufacturing to Industry 4.0, only in this way can we ensure that China is in a leading position in the world in the layout of the industrial chain.

What do you think about Apple's move out of the mainland? Can India become the second China? Everyone is welcome to like, retweet and comment.

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