Escape from China: half of all iPhone handsets could be made in India by 2027

By Scott Marlette Last updated Jan 17, 2023

The English-language South China Morning Post (SCMP) says that Apple’s largest contract manufacturer, Foxconn, has already finalized plans to move some iPad and MacBook production from China to Vietnam. It’s no secret that Apple has been dying to move production of its products, including the all-important iPhone, out of China. Such a move was discussed in earnest back in 2019 when the U.S. imposed tariffs on certain products imported from China.

The tariffs were merely an import tax that U.S. companies and consumers paid. Luckily, the U.S. and China agreed to end the imposition of tariffs before they escalated to include the iPhone. Still, some Apple products were affected and CEO Tim Cook internally seethed because the tariffs that Apple had to pay (or else its own customers would have to pay in the form of a price hike) were initiated by the United States government.

Cook would love to see Apple leave China and produce the iPhone in India and Vietnam

There are several reasons why Cook would love to get Apple out of China. One is that the relationship between the U.S. and China has not thawed so there is always the possibility that the trade war between the two countries heats up again. Also, Apple is fearful that the Chinese government could order a lockdown in an attempt to slow the spread of COVID; the last time this took place in November, Foxconn’s assembly line was decimated as employees tried to escape from being under the thumb of the COVID lockdown.

In 2019 Apple advertised The Incredible iPhone 6s in India

Even Apple had to admit that the COVID crackdown affecting Foxconn’s largest iPhone assembly facility in Zhengzhou would impact availability of the iPhone 14 Pro series models. The tech giant said, “We now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated and customers will experience longer wait times to receive their new products.”

As early as this May, iPad and MacBook units could be produced in Vietnam via Foxconn’s factory in the country’s Bai Giang province. Apple’s goal is to make in Vietnam the products that Apple currently has manufactured in China. Foxconn already has 60,000 people employed in Vietnam.

Sumit Vakil, the co-founder of Resilinc, a company that consults others about their supply chains, says, “The uncertainty of and dependency on China have really thrust the importance of knowing who your suppliers are, into the spotlight and into boardrooms. There is no going back to how supply chains operated [before the onset of] Covid-19.”

Besides China, Apple already produces the iPhone in India. Starting with the iPhone SE in 2017, Apple has had older models roll off of the assembly line at Wistron facilities in India. Last year, Apple gave Wistron the green light to produce the iPhone 14 leading ultra-reliable TF International analyst Ming-Chi Kuo to tweet, “The iPhone 14’s mass production schedule in India is still about six weeks behind China, but the gap has improved significantly.”

One analyst says half of all iPhones released globally will have been assembled in India by 2027

Making a forecast for this year, Kuo summed things up, “Therefore, it is reasonable to expect that India and China will be able to produce the iPhone 15 at the same time next year.” And this is a sign that Apple will be able to move iPhone production out of China slowly but surely.

Luke Lin, an analyst working at the research division of Taiwan’s DigiTimes says that by 2027, India could be the country of origin for 50% of the world’s iPhone production. Invest banking firm JP Morgan calculates that 25% of global iPhone production will come from India by 2025. From April through December of 2022, the number of iPhone units shipped from India doubled compared to the number delivered during the same time frame during the previous year.

China remains an important market for Apple as annual growth in iPhone shipments hit 36% during the calendar third quarter while all local competitors including Xiaomi and Oppo reported declining deliveries.

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