Apparently Apple has had enough of the constant lockdowns in China and now wants to produce the new iPhone 14 in India. Tensions between Washington and Beijing also contribute to this decision.
According to Apple, with the Production of the iPhone 14 in India started as the company diversifies its supply chains away from China. The company makes most of its phones in China, but has already shifted some production to other countries amid rising tensions between Washington and Beijing. China’s “zero Covid” policy, which has led to widespread lockdowns, has also caused significant disruption to businesses over the past two years. Beijing’s anti-business policy has already ensured that more and more companies are interested in new production sites. Apple is one of the larger and better known of these.
The tech giant unveiled its latest iPhone earlier this month. “The new iPhone 14 range offers groundbreaking new technologies and important security features. We are excited to produce the iPhone 14 in India,” Apple said in a statement. The Taiwanese company Foxconn, which makes most of Apple’s phones, has had a branch in the southern Indian state of Tamil Nadu since 2017, where it manufactures older versions of the phones. But now Apple is going all out to produce its latest product – the iPhone 14 – in India.
By betting on India, Apple also wants to expand its presence in that country. Last year, the company’s market share there was around 4 percent. The US giant is struggling to compete with the much cheaper South Korean and Chinese smartphones that continue to dominate the Indian smartphone market. Manufacturing in India doesn’t mean the phones are cheaper in the country, however, as there are high import duties on components and other taxes. Even if Indians see the Made in India label on their iPhone, they still have to pay a hefty sum for it.
However, it should be noted that Apple also makes enormous profit margins on its own products. For example, according to one calculation, the iPhone 13 costs about $570 to manufacture, but sells around $999 to $1,449 depending on features. Since this was already the case with the previous models, the new iPhone 14 will not be much different. In this respect, one can certainly speak of “homemade problems” in this regard.
For Beijing, however, the loss of flagship companies is becoming a prestige problem. In recent decades, the Middle Kingdom had developed into the “workbench of the world”, which, however, also made the global supply chains vulnerable. A similar problem arises from the global chip industry’s dependence on production in Taiwan, which is vulnerable to a total blockade by the Chinese People’s Liberation Army.