Apple Inc will manufacture the iPhone 14 in India

NEW DELHI (AP) — Apple Inc. will manufacture its iPhone 14 in India, the company said Monday, as manufacturers shift production out of China amid geopolitical tensions and pandemic restrictions that have disrupted supply chains for many industries.

“The new iPhone 14 range introduces groundbreaking new technologies and key security features. We are excited to manufacture the iPhone 14 in India,” Apple said in a statement.

Apple unveiled its latest line of iPhones earlier this month. They’ll have upgraded 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’s iPhone sales have struggled to capture a large share of the market against cheaper smartphones from competitors.

The announcement by the Cupertino, California-based company aligns with Prime Minister Narendra Modi’s push for local manufacturing, which has been a key goal of his administration since he took office in 2014.

The tech company has placed heavy bets on India, where it first began manufacturing its iPhone SE in 2017 and has since assembled a number of iPhone models there. Apple launched 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 is shipped by Foxconn, a major iPhone assembly company whose facilities are located 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 the end of this year and increase it to 25% by 2025, according to a report by JP Morgan, quoted by the Press Trust of India news agency.

Analysts expect nearly a quarter of all Apple products to be made outside of China by 2025, compared to about 5% currently. Supply chain risks such as China’s strict COVID-19 lockdowns are likely to be the catalyst for such relocation efforts, which will continue over the next two or three years, the report said.

“Apple has been trying to diversify its supply chain for some time, but those efforts have increased over the past two years due to US-China trade sanctions,” said Sanyam Chaurasia, an analyst at Canalys.

Last year, the tech giant made around 7 million iPhones in India. This news is likely to significantly increase the number of Apple smartphones made in India, he added.

He said the plan to make more iPhones in India could also prompt Apple to lower its prices for the Indian market, making it more competitive. “You can have a more aggressive pricing strategy if you produce locally,” Chaurasia said.

Most of Apple Inc.’s smartphones and tablets are assembled by contractors with factories in China, but the company began asking them in 2020 to explore the possibility of moving some production to Southeast Asia or elsewhere after repeated shutdowns, disrupted its global product flow to combat COVID-19.

Apple hasn’t released any details, but according to news reports, the company plans to set up tablet computer and wireless headphone assembly in Vietnam.

Other companies are maintaining or expanding manufacturing in China to serve the domestic market while doing export-oriented work to other countries due to rising wages and other costs, as well as the difficulty for foreign executives to visit China for anti-COVID-19 travel shift restrictions.

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AP business writer Joe McDonald in Beijing contributed.