Apple plans to diversify iPhone production

The company aims to begin manufacturing the iPhone 14 in India about two months after the product’s initial release out of China

Apple is working with suppliers to ramp up manufacturing in India and shorten the lag in production of the new iPhone.

Apple plans to begin manufacturing the iPhone 14 in India about two months after the product’s initial release out of China, narrowing the gap between the two countries but not closing it completely as some had anticipated.

The company has been working with suppliers to ramp up manufacturing in India and shorten the lag in production of the new iPhone from the typical six to nine months for previous launches, according to people familiar with the matter. Apple, which long made most of its iPhones in China, is seeking alternatives as Xi Jinping’s administration clashes with the US government and imposes lockdowns across the country that have disrupted economic activity.

Analysts such as Ming-Chi Kuo of TF International Securities have said they anticipate Apple will ship the next iPhone from both countries at roughly the same time, which would have been a significant benchmark in Apple’s efforts to diversify its supply chain and build redundancy.

Foxconn Technology, the primary manufacturer of iPhones, studied the process of shipping components from China and assembling the iPhone 14 device at its plant outside the southern Indian city of Chennai, said the sources. That included looking at ways to maintain Apple’s high standards for confidentiality.

Apple and Foxconn ultimately determined a simultaneous start in India and China isn’t realistic this year, although it remains a long-term goal, said the people. The first iPhone 14s from India are likely to be finished in late October or November, following the initial September release, the sources said. An ambitious target would be the Diwali festival that begins in late October. 

A spokesman for Apple declined to comment. 

Shares rise

Shares in Redington India, which distributes Apple products in the country, rose on the news. 

Matching China’s pace of iPhone production would have marked a major milestone for India, which has been touting its attractiveness as an alternative at a time when rolling Covid lockdowns and US sanctions jeopardise China’s position as factory to the world. Assembling iPhones often entails co-ordination between hundreds of suppliers and meeting Apple’s infamously tight deadlines and quality controls.

Some people within Apple and Foxconn had hoped to begin simultaneous production in India this year, but that was never an official plan. To ensure a smooth launch, Apple wanted to focus on getting the China operations up to speed first and then work out the India production, one of the sources said.

Apple’s partners began making iPhones in India in 2017, the start of a years-long effort to build manufacturing capabilities in the country. Besides offering backup to its existing operations, the country of 1.4bn people is a promising consumer market and the Indian administration has offered financial incentives for tech production under its Make in India programme.

One challenge is secrecy. Apple goes to extreme lengths to keep new product details confidential, and imposing the same rigorous controls in a second country would prove difficult.

• With assistance from Debby Wu and Mark Gurman. Bloomberg