US based Apple is reportedly asking suppliers to move some AirPods and Beats headphone production to India, says a report by Nikkei. The move comes as the iPhone maker seeks to gradually diversify its production from China to lower the risk of supply chain disruptions stemming from the country’s strict zero-COVID policy and tensions with the U.S. Quoting three people familiar with the matter, the Nikkei report says that iPhone assembler Foxconn is preparing to make Beats headphones in the country, and hopes to eventually produce AirPods there as well, two people with direct knowledge of the matter said. The move, it says, will be a big win for New Delhi as it attempts to rise in the global supply chain.
According to the report, Luxshare Precision Industry and its affiliates, which already produce AirPods in Vietnam and China, also plan to help Apple make the popular wireless earphones in India. However, Luxshare is focusing more on its Vietnamese AirPods operations for now and could be slower than its competitors in starting meaningful production of Apple products in India, one of the people said.
Foxconn declined to comment, while Apple and Luxshare did not respond to Nikkei Asia’s request for comment.
Apple started iPhone production in India in 2017 by a smaller supplier, Wistron, but only accelerated such production last year. The company’s latest iPhone 14 series is also being manufactured in the country for local as well as global markets. While manufacturing in India was initially aimed at serving the massive local market, Apple is now developing the country as a strategic production base, with exports intended for markets such as Europe, the Nikkei report said.
India’s share in the global handset production market is growing from around 9% in 2016 to 16% in 2021, according to Counterpoint Research. It plans to spend $30 billion to further strengthen its electronics supply chain, from semiconductors and materials to displays and electronics manufacturing, to attract more investment. Meanwhile, China’s share declined from 74% in 2016, before the trade war and pandemic, to about 67% in 2021.
Joey Yen, a tech analyst with IDC, told Nikkei Asia that India will emerge as a key alternative for electronics production outside China.
“India is learning from China’s success over the years, and it has a similar potential to become a very meaningful player in the global supply chain. It has young engineering talent and a big workforce, and a massive domestic market as a foundation,” Yen said.
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