Recently, according to the well-known international media "South China Morning Post" in Hong Kong, Apple began mass production of the iPhone 16 series in India, including the high-end Pro series, which is the first time in its history to produce the latest model outside of China.
Some observers pointed out that Apple's decision is a continuous promotion of the global supply chain diversification strategy, aimed at dealing with geopolitical risks, especially tensions between China and the United States.
However, more observers are skeptical, and they are pessimistic about the prospects of Apple's India factory, after all, India has neither sufficient high-end mobile phone manufacturing infrastructure, nor a well-established supply chain, nor a large number of skilled and high-quality technicians, which will make the yield rate of Apple-made iPhones in India "challenging".
Some observers even put it bluntly: "
Apple's expansion of production in India, changes and challenges in global supply chain strategy
Apple's decision to produce its latest iPhone 16 series in India marks a major shift in its supply chain strategy.
This move is not only to address geopolitical challenges, but also to demonstrate Apple's desire to reduce risk and strengthen the resilience of its global production network by diversifying its supply chain. Industry analysts point to this strategic shift as an opportunity for India, but it also raises questions about India's manufacturing capabilities.
Apple has long relied on China's manufacturing base to produce its high-end phone models, while suppliers in India are mainly responsible for assembling low-end and older iPhones.
Recent reports show that Apple has begun mass production of its latest iPhones, including the high-end Pro series, in India, which is undoubtedly part of its diversified supply chain strategy. However, it remains to be seen whether this strategy will be successful.
China has long dominated Apple's supply chain because it not only has world-leading manufacturing capabilities, but also has a complete upstream and downstream industrial chain, from raw material supply and component manufacturing to final assembly, which is interlinked and extremely efficient. India has obvious shortcomings in this regard.
While India has introduced production-linked incentive schemes (PLIs) and attracted important apple suppliers like Foxconn through policy support, there are still many uncertainties about whether these policies will actually lead to sustainable production capacity gains.
Previously, many multinational companies had to reduce or stop production after setting up factories in India due to problems such as poor infrastructure and shortage of skilled workers. Whether Apple's move will break this limitation remains an open question.
Although India's labor costs are relatively low, policy support is strong, and the government actively promotes local manufacturing, the reality of the manufacturing environment still faces many challenges.
India's manufacturing base is relatively weak, and there is a significant gap between the training of skilled workers and the advancement of production equipment with China. According to Canalys analyst Sanyam Chaurasia, although India continues to expand its production capacity, its supply chain and production efficiency are still difficult to match China's, especially in the production of high-end smartphones.
As iPhone designs become more complex, every step of the production process requires high precision and efficiency, and India's current level of technology is not enough to meet this requirement.
In addition, Apple's production expansion in India also reflects the geopolitical risks facing global tech giants. Ongoing tensions between China and the United States have prompted companies such as Apple to shift some of their production out of China to reduce their dependence on a single market.
India, the world's second most populous country, offers a potentially large market and labor pool, making it an important candidate in Apple's global supply chain strategy. However, in terms of technological maturity and worker skill levels, India is still some way from becoming a true high-end manufacturing base.
Although Apple has expanded production in India, China remains key to Apple's supply chain. Most of the high-end iPhones are still made in China, not only because of China's mature production system, but also because China has the most complex and complete supply chain network in the world.
For a production-intensive company like Apple, China's advantage lies in its ability to provide full production support – from the supply of raw materials and core components upstream to efficient assembly downstream.
Even if Apple assembles some of its products in India, many key components still need to be imported from China, indicating that China's central position in the global supply chain will be difficult to shake in the short term.
Analysts generally believe that Apple will take a "balanced" approach in the future, that is, to expand production in India and other regions while maintaining China's position as its high-end production center. After all, the high complexity and technology intensity of manufacturing means that it will take time to fully replace China's role in global supply chains.
What does Apple's global diversification strategy mean for China?
Apple's move of some iPhone 16 production to India reflects its diversification strategy to address global geopolitical and economic risks. While this approach can reduce dependence on a single country, especially in the context of tensions between China and the United States, its feasibility remains questionable.
From China's point of view, although this adjustment of the supply chain may have a certain impact in the short term, it also provides an important opportunity for reflection in China's manufacturing industry in the long run.
Apple has established a well-established production system in China for many years, and with China's mature supply chain, efficient manufacturing capacity and rich reserve of skilled workers, Apple has been able to continue to launch high-quality products.
In contrast, India's manufacturing base is still relatively weak, and its supply chain does not have the multi-layered advantages of China. Although India has attracted a large number of multinational companies to invest with low-cost labor and policy support, practical problems still plague India's manufacturing industry, such as insufficient labor technology, relatively backward infrastructure, and imperfect supply chains, which have brought uncertainty to Apple's production in India.
Many observers point out that Apple's production in India may face various challenges, including how to produce skilled workers who meet Apple's standards in the short term, and how to build a supply chain system that is as efficient as China.
Apple needs to invest a lot of resources in India construction training and supply chain optimization, and the political friction between India and China may affect the parts trade between China and India, further making it difficult to make in India.
In the short term, Apple's shift of some production to India will indeed have an impact on China's manufacturing industry, especially in terms of employment opportunities.
As one of China's largest foreign-owned technology companies, Apple's manufacturing and production activities provide a large number of employment opportunities for foundries such as Foxconn. Once Apple shifts some of its production to India, some jobs may be reduced, especially in low-skilled and basic assembly areas, and the impact could be significant.
But the more far-reaching impact is that this change actually provides an opportunity for China's manufacturing industry to upgrade and transform. As Apple gradually shifts its low-end assembly business to other countries, China's manufacturing industry can move away from low-cost, low-value-added foundry models and move towards high-end manufacturing and technological innovation.
In recent years, the Chinese government has been promoting the upgrading of the manufacturing industry, encouraging local enterprises to carry out independent research and development and innovation, and reducing their dependence on foreign orders. Apple's transfer can instead promote China's manufacturing industry to climb the value chain from low-end to high-end, so as to maintain competitiveness in the global market.
In addition, Apple's fragmented layout in the global supply chain cannot completely replace China's position. As Canalys analyst Sanyam Chaurasia points out, China's manufacturing strengths are not only reflected in the assembly process, but also in the upstream complex component production and the delicate operation of skilled workers.
These elements are difficult to replicate in India or other countries in the short term. As a result, while Apple does some of its production in India, the production of high-end iPhones and their key components still relies on China's mature supply chain network. In other words, Apple's diversification is more of a risk management than a replacement for Made in China.
Apple's biggest takeaway from China's strategic adjustment is that China's manufacturing industry needs to accelerate independent innovation and get rid of excessive dependence on foreign companies.
In recent years, with the rise of domestic brands such as Huawei, Xiaomi, OPPO, etc., China's local technology companies have gained a considerable share of the international market. By continuing to promote the development of these local enterprises, China is expected to build a stronger independent innovation system in the near future and reduce its dependence on foreign orders.
At the same time, China can respond to Apple's production shift by increasing investment in high-tech manufacturing. 5G, artificial intelligence, chip manufacturing and other fields are becoming the key directions of China's future scientific and technological innovation. By deepening its efforts in these areas, China will be able to further enhance its voice in the global supply chain and gain a larger market share in the manufacture of more high-value-added products.
It is foreseeable that the global supply chain will be a more diversified system in the future, and countries such as China, India and Viet Nam will play an important role in it. However, with its long-term accumulated manufacturing experience and supply chain network, China will still maintain its irreplaceable position in the field of high-end manufacturing.
Although multinational companies such as Apple are trying to reduce their dependence on China, China's supply chain advantages and manufacturing capacity will continue to be important in the future.
A little summary
Apple's strategy to shift some of its production to India is both a move to diversify its supply chain and a reflection of global geopolitical uncertainty. In the short term, this strategy poses some challenges for China's manufacturing sector, especially in the employment and low-end manufacturing sectors.
However, in the long run, this adjustment of the supply chain provides an important opportunity for China to accelerate the upgrading of the manufacturing industry and independent innovation, enhance the added value of the industrial chain, and further consolidate its core position in the global supply chain.
China can ensure its competitiveness in the global market by strengthening high-end manufacturing and promoting technological innovation. Apple's diversified layout will not change China's important role as a global high-end manufacturing center. As the global manufacturing landscape continues to evolve, China will continue to play a key role in the global supply chain.