Apple announced this week that it will begin producing its new iPhone 14 models in India rather than China, marking one of the company’s most significant departures from the country amid a re-evaluation of partnerships with Chinese supply chains across the sector.
“The new iPhone 14 lineup introduces groundbreaking new technologies and important safety capabilities”, Apple said in a statement first seen by CNBC.
Despite the fact that Apple previously built some smartphones in India, like as the 2017 SE model, a JP Morgan study quoted by CBS News indicates that just approximately 5% of the company’s total products are currently assembled there. The share of gadgets made in India is estimated to reach roughly 25% by 2025, thanks in part to the stated adjustment.
However, the move to India has less to do with the South Asian market in general and far more to do with the simmering geopolitical sword rattling between the United States and China. According to Counterpoint Research, Apple did not even crack the top six smartphone manufactures in India by market share in Q1. Apple lagged behind Samsung even in the high-end luxury market.
Simultaneously, Apple has come under fire in recent years for its close ties to Chinese manufacturing and perceived double standards when it comes to moral business operations in China vs its home nation.
For years, opponents and workers producing Apple goods in China have accused the company of encouraging dangerous working conditions. Recently, The New York Times and others conducted investigations into how it stores data in China and how it reportedly collaborates with the government to delete politically sensitive apps from its App Store. China is also the world’s largest smartphone market and one of Apple’s fastest growing sales locations, complicating its assembly options even more.
With its minor shift away from China, Apple is following in the footsteps of other larger US tech corporations. Google, one of Apple’s main smartphone competitors, began shifting its Pixel phone production out of China in 2019. Other major US technology corporations have gone even further to distance themselves from the country. Last year, Yahoo announced the closure of the balance of its operations in China. LinkedIn, which has a seven-year presence in China, also announced its exit, though they did indicate they will build a second, similar service for the Chinese market.
In general, Apple’s reorientation of iPhone manufacture comes as the United States and a number of other countries work to reduce their reliance on Chinese supply networks. These broad shifts away from Chinese supply chains accelerated during President Donald Trump’s presidency, when he urged large American corporations to “immediately begin looking for an alternative to China,” and accelerated even more during the pandemic-fueled semiconductor scarcity. Though some of Trump’s blustering rhetoric against China has subsided, the wider supply chain reorientation has essentially continued unabated.
This broader reorientation affects US IT goods en route to China. The Biden Administration reportedly directed chip-making behemoths Nvidia and AMD earlier this month to ban exports of certain advanced AI chips to China. And, if recent congressional testimony is any indication, China-related fear-mongering among US politicians is at an all-time high, implying that calls to distance ourselves from Chinese manufacturing, legitimate or not, are unlikely to abate anytime soon.