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Apple Production in India and Vietnam

by News Strasbourg
Apple Production

Over 90% of Apple products including iPhones, iPads, and MacBook laptops are manufactured in China. China being the first blush of Covid-19 has disrupted the chain supply of Apple production because of the anti-covid measures in Shanghai and other cities of China, and because of it, they are unable to send their executives and engineers thus unable to check the progress in person. In the thick of Covid-19 rigid restrictions and the indirect support of Beijing towards the Russian invasion of Ukraine have collectively led the global supplier of tech beast Apple Inc to presume that there should be a decline in their reliance on China and that the production of Apple should be heightened outside of it. They are considering contract manufacturers, India and Vietnam to be the next mondo of production. They both already have Apple production sites. Find out why Apple chose these two countries, what are they offering and what effects it has on their domestic markets.

Why choose India and Vietnam?

The main reason that Apple cites is extending the supply chain to meet the demands outside of China as it got disrupted by covid-19 restrictions. The process was hastened after the U.S.-China tension peaked. For iPad production, they chose Vietnam, as Airpods were already being made in Vietnam by iPhone makers. The pool of qualified workers and low cost attracted them to India as a replacement for China.

What India is offering to Apple Inc?          

Before jumping into the fat details, let’s talk about the Indian critiques first. India is the Apple production site for their domestic market since 2017, the first generation iPhone SE was first manufactured there in 2020. Later, iPhone 11 and 12 started manufacturing; iPhone 13 is the fourth model to be produced there locally. Its assembling has been created at the Foxconn plant in Tamil Nadu. Besides, Jammu Kashmir is the leading site to produce 60% of total India’s Apple products, other sites are Himachal Pradesh, Uttarakhand, and the Hills of Uttar Pradesh.

Production rate: India has become the home producer of many Apple products it made up 3.1% of the world’s iPhones last year, and the proportion will be increased from 6% to 7% this year. In the first quarter of 2022, India’s iPhone production rate increased to 50%, sold 1 million iPhones “Made in India” and Apple is planning to produce iPads locally, soon.

Contract Manufacturers of India: There are two contract manufacturers for Apple in India; one is the local plant of Apple’s Taiwanese contract manufacturer Foxconn and the other is Wiston. Including, Pegatron will be the third contract manufacturer, in this new blueprint, iPhone production will reach to 25,000 crores in the fiscal year 2023.

What Vietnam is offering to Apple Inc?

Let’s talk about Vietnam’s critiques now. Vietnam was already a significant producer of Airpods, as the outturn of iPad segment was decreasing year by year to 1.92% due to China’s anti-covid restrictions, tech and labor shortage, slow deliveries and reduced output hurt the total sale count, on this wise to build up an extra inventory to meet the iPad demands, Apple shifts its manufacturing units outside of China for the very first time to Vietnam. Apart from iPad production, the company has asked the supplier to make some power-related chips for the upcoming iPhones.

Contract Manufacturers of Vietnam: Foxconn has already moved its iPad production to Vietnam in June, after China, Vietnam is the largest manufacturing site for Foxconn. The company is planning to increase employment in the coming years, currently, there are 60,000 employees. Pegatron has also made an announcement to invest up to one billion dollars into Vietnam along with three other projects for computers, electronic pieces of equipment, and circuit boards. Wistron also has thousands of workers in Vietnam.

What are the effects on Domestic Market?

Considering the fact, when these high-tech productions are being manufactured in your own country, ultimately it becomes cost-effective in comparison to the imported ones. For example, In India, iPhone 12 sale price is Rs 69,900 is now available for Rs 55,999. iPhone 13 series is soon to begin its production in India; its launch will further decrease the price of previous iPhone models. Hence, benefiting both parties! Similarly, Vietnam provides discount programs on Airpods and iPads for sale.

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