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| Photo Credit: AP. |
NEW DELHI (AP) — Apple Inc. will make its iPhone 14 in India, the company said on Monday, as manufacturers shift production from China amid geopolitical tensions and pandemic restrictions that have disrupted supply chains for many industries.
“The new
iPhone 14 lineup introduces groundbreaking new technologies and important
safety capabilities. We’re excited to be manufacturing iPhone 14 in India,”
Apple said in a statement.
Apple
unveiled its latest line-up of iPhones earlier this month. They will have
improved cameras, faster processors and longer lasting batteries at the same
prices as last year’s models.
India is the
world’s second-largest smartphone market after China but Apple iPhone sales
have struggled to capture a large share of the market against cheaper
smartphones from competitors.
The
announcement from the Cupertino, California-based company dovetails with Prime
Minister Narendra Modi’s push for local manufacturing, which has been a key
goal for his government ever since he took office in 2014.
The tech
company has bet big on India, where it first began manufacturing its iPhone SE
in 2017 and has since continued to assemble a number of iPhone models there.
Apple opened its online store for India two years ago, but the pandemic has delayed
plans for a flagship store in India, according to local media reports.
The latest
model will be shipped out by Foxconn, a major iPhone assembler, whose
facilities are on the outskirts of Chennai, a city in southern India.
Apple is
likely to shift about 5% of its iPhone 14 production to India from later this
year, raising it to 25% by 2025, according to a JP Morgan report quoted by the
Press Trust of India news agency.
The analysts
expect that nearly a quarter of all Apple products to be manufactured outside
China by 2025, compared to about 5% now. Supply chain risks like the stringent
COVID-19 lockdowns seen in China are likely the trigger for such relocation
efforts that will continue over the next two or three years, the report said.
“Apple has
been trying to diversify its supply chain for a while, but these efforts have
grown in the last two years over trade sanctions between the U.S. and China,”
said Sanyam Chaurasia, an analyst at Canalys.
Last year,
the tech giant manufactured around 7 million iPhones in India. This news is
likely to significantly increase India-made Apple smartphones, he added.
He said the
plan to make more iPhones in India may also lead Apple to drop its prices for
the Indian market, making it more competitive. “You can adopt a more aggressive
pricing strategy if you manufacture locally,” Chaurasia said.
Most of
Apple Inc.’s smartphones and tablets are assembled by contractors with
factories in China, but the company started asking them in 2020 to look at the
possibility of moving some production to Southeast Asia or other places after
repeated shutdowns to fight COVID-19 disrupted its global flow of products.
Apple hasn’t
released details, but news reports say the company planned to set up assembly
of tablet computers and wireless earphones in Vietnam.
Other
companies are keeping or expanding manufacturing in China to serve the domestic
market while shifting export-oriented work to other countries due to rising
wages and other costs, as well as the difficulty for foreign executives to
visit China due to anti-COVID-19 travel restrictions.
AP Business
Writer Joe McDonald in Beijing contributed.