US sanctions and the impact of the pandemic are forcing Apple contractors to look to India and Vietnam as alternative locations for their manufacturing facilities. According to some estimates, up to half of all iPhones will be assembled in India by 2027, although this country now has a share of no more than 5% in this area.
A similar forecast was made by analysts at DigiTimes Research, as noted by South China tomorrow post. India now ranks eighth in Apple’s supply chain, with 278 factories owned by the two companies that make products for Apple. In fact, this only allows them to claim 2.3% of Apple’s entire supply chain. Vietnam ranks 14th, with two companies operating 160 departments, and the country’s share in the supply chain is no more than 1.3%. According to Bloomberg, China has 121 Apple suppliers with 2,360 locations, accounting for 19.3%.
In short, to take on half of all iPhone production orders by 2027, Indian companies will have to scramble. That forecast is even more ambitious than JPMorgan’s estimate, which mentions India’s readiness to produce up to a quarter of all iPhones by 2025. In the last three quarters of last year, India doubled Apple smartphone shipments compared to the same period in 2021.
Taiwanese company Wistron began assembling the iPhone SE in India in 2017. Last fall, assembly of the iPhone 14 began in India with minimal time lag compared to China. By the time the iPhone 15 family debuts this year, assembly of next-generation smartphones in India will begin synchronously with China, according to renowned analyst Ming-Chi Kuo. According to State of Flux analysts, the biggest challenge for Apple’s Indian suppliers now is to quickly raise the level of product quality to meet this customer’s requirements. It’s taken years for Apple’s Chinese contractors to get things right, and Indian rivals won’t have time to step up.