India is exploring options to bring some of Apple’s iPad production to the country from China, according to two sources close to the Indian government. The tech giant is said to be holding ongoing discussions with officials. No concrete plans have been made, but if successful, it would expand Apple’s footprint in the country.
Apple announced earlier this year it had begun assembling its flagship iPhone 14 in southern India. The tech giant has been producing the older models of the iPhone in the country for a few years.
The tech giant’s ambitions to diversify more of its supply chain away from China follows protests across the country over the past two weeks amid Beijing’s strict zero-Covid policy. Apple warned in early November that iPhone shipments would be delayed due to the lockdowns in China, and analysts have been trimming iPhone estimates for the crucial holiday quarter.
The Wall Street Journal reported over the weekend that Apple is actively looking to shift production out of China to other countries in Asia, including India and Vietnam.
However, sources caution that a lack of highly skilled talent and individuals with expertise in building highly complex devices like the iPad could slow down these plans in India. The foreign policy backdrop also doesn’t help, with tensions growing between India and China. The two countries have squared off in recent years over territorial disputes resulting in escalated military presence at the India-China border.
Gene Munster at Loop Ventures estimates that 10% of iPhones are manufactured in India, but expects production to increase a slow pace.
“I think in five years, 35% will be manufactured in India,” added Munster. “I think Apple will add iPhone production to other countries outside of India and China in the next five years. Perhaps Vietnam, Malaysia and the USA.”
In a note to clients today, Piper Jaffray’s Harsh Kumar wrote: “While Apple has made efforts to move production out of China, in our opinion, India still accounts for less than 5% of total iPhone 14 production and is likely to help only to a limited degree at this time.”
