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[global times reporter ding yazhi, global times special correspondent in india cao chongrenzhong] apple will hold its annual autumn conference on september 9, us time. as usual, the new iphone 16 and iphone 16 pro series will be unveiled at this conference, and major industry chains have entered an intensive stocking period. compared with previous years, a major change this year is that chinese and indian factories have started assembling the latest iphone together, and the pro series, which has been mainly produced in china, is also produced in india for the first time. this has attracted widespread attention in the industry, and the indian media has even called it "an important milestone." however, many analysts believe that it is still difficult for the "indian apple chain" to make greater progress.

“major shift” and “positive signals”

a recent report released by bloomberg shows thatapple supplier foxconn's plant in tamil nadu will begin producing iphone 16 pro and iphone 16 pro max models.india has responded very positively to the company's decision to undertake the production of the latest apple products. the indian website "siliconindia" reported that the upcoming iphone 16 pro may represent a major shift in apple's manufacturing strategy in india. at the same time, apple's production expansion in india is also seen as a positive signal for the development of india's electronics manufacturing industry, which may attract more foreign direct investment and further promote india's position in the global supply chain.

it is understood thatapple has started producing mobile phones locally in india in recent years, but most of the products involved are older models.according to statistics, india currently undertakes part of the production tasks of apple products including iphone se, iphone xr, iphone 12 to iphone 15. in 2023, indian factories assembled about 30 million iphones, and the production capacity has increased to 18 million in the first half of this year. in addition to supplying the local indian market, these devices will also be exported to overseas markets such as the united states.

as apple increases its production capacity in india, it also increases local employment opportunities. citing a recently released report, the "siliconindia" website said that since the indian government introduced "production-linked incentives," apple and its suppliers have created a total of approximately 165,000 direct jobs. according to the indian brief, apple's three contract manufacturers in india, including foxconn, wistron (now tata electronics) and pegatron, have created 80,872 direct jobs. in addition, the broader supplier network, including companies such as salcomp and motherson, has created approximately 84,000 direct jobs.

the rapid growth of the indian market and the government's supportive policies have made apple place high hopes on the indian market and regard it as one of the key markets for apple's future growth. earlier this year, "india" was mentioned 15 times in apple's earnings conference call. apple ceo cook said that he was "very optimistic about india" and that it was "the focus of our attention."

a stark contrast to apple's "zero defects"

however, "made in india" has been criticized in the market in recent years. taiwan's "china times news" reported in july that although the proportion of iphone 15 oems in india is only 10%, there are many problems. among them, the yield rate of iphone oems in india (only about 50%) and hygiene management (excessive e. coli) directly led to poor product sales. india released the "made in india" iphone 15 on september 22 last year. at that time, many local customers said they would never buy it. on the one hand, it was because the price was higher than that in europe, the middle east and other regions, and on the other hand, the quality was not guaranteed.

the financial times recently reported that in an iphone parts factory operated by an indian company, only one out of every two parts is intact and can be sent to foxconn's assembly plant. this 50% "qualified rate" is very different from apple's long-standing "zero defect" production standard. disassembly videos posted by some video bloggers on social media also revealed a variety of defects in apple phones assembled in india, such as obvious fingerprints on the motherboard and dust inside the camera.

nikkei asian review quoted analysts from technology research firm counterpoint research as saying that india has benefited from being one of the main smartphone assembly sites outside of china, and major brands are seeking to diversify their production sites and develop the indian market. however, in the next few years, india's growth in apple's supply chain will be limited to the assembly of final products, and the production of more critical electronic and mechanical components will still be concentrated in china, because india cannot yet compare with china in terms of efficiency, infrastructure and talent reserves.

foxconn's reversal illustrates a problem

due to the above challenges, foxconn, apple's main contract manufacturer, which has gradually shifted low-end manufacturing to india and vietnam in recent years, has reversed.in late july, foxconn announced that it would invest 1 billion yuan to build a new business headquarters building in zhengzhou, henan, and began recruiting new employees on a large scale at its zhengzhou factory in china to meet the production needs of the iphone 16 series. according to hong kong's "asia weekly", from the end of june to the beginning of july, foxconn in guanlan, shenzhen, guangdong, also accelerated its recruitment. this shows that foxconn is actively expanding its production lines in china to ensure the smooth launch of apple's new products.

"while apple has been working to diversify its supply chain and move more production elsewhere in asia amid geopolitical risks, china remains the company's primary manufacturing base."according to the hong kong-based south china morning post, apple's supplier list updated in april showed that in the last fiscal year, the company added eight suppliers in mainland china and eliminated four. this is the first time since 2021 that the number of new suppliers added by apple in china has exceeded the number of suppliers eliminated. the report said that this change not only reflects apple's fine-tuning of its global supply chain strategy, but also further highlights china's important role in global manufacturing and supply chain management.

lin minwang, a researcher at the center for south asian studies at fudan university, told the global times on the 2nd that apple's increased investment in the indian market is partly due to geopolitical considerations rather than a simple market choice. on the other hand, although india's wealthy class and consumer groups that can buy apple products cannot be compared with china, it is still a market that cannot be ignored. in addition, by establishing an industrial chain in india, apple can reduce the cost of the entire supply chain, thereby gaining a more advantageous position in negotiations with chinese suppliers. therefore, despite some challenges, apple is still optimistic about the potential of the indian market and continues to invest locally. however, in the field of manufacturing, india has obvious limitations compared to china. although india's labor costs may be relatively low, india's logistics costs are several times that of china, and its labor force's skill proficiency and overall functional efficiency are no better than china's.