Apple has begun to shift some of its manufacturing away from China to India and Vietnam and is planning to increasingly look to those two countries to produce its devices, according to analysts.
A client report from JP Morgan said the tech giant had already started manufacturing an unspecified amount of its devices in India and Vietnam.
According to the bank’s analysts, Apple is set to shift 5% of global iPhone 14 production to India by late 2022. It is expecting to produce 25% of all iPhones in India by 2025.
Vietnam is expected to produce 20% of all iPad and Apple Watches, as well as 5% of MacBooks and 65% of AirPods by 2025, the report said.
According to Bloomberg, Apple has scrapped plans to increase production of iPhone 14 phones by 6m units as an expected surge in demand failed to materialise.
There has long been speculation that companies including Apple are looking to move manufacturing away from China as part of a China-plus-one or reshoring policy, but relatively few companies have so far made any public declaration of shifting their supply chains to alternative destinations.
Among firms that have invested in India in recent years are Taiwanese electronics manufacturers Foxconn and Wistron, which have been attracted by subsidies as well as competitive labour costs.
Samsung and Xiaomi also make handsets in the country and Google is reportedly planning to shift production of Pixel smartphones to India.
Two weeks ago, Google was reported to be considering moving production of between 500,000 and 1m units – around 10-20% of annual Pixel shipments – to India.
However, Google refused to confirm reports of the move, which was said to be partially prompted by supply chain delays as a result of China’s zero-tolerance Covid-19 policy.
India imposes a 20% import tax on smartphones made externally, making it lucrative for tech companies looking to serve this growing market.
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