**Apple’s Transition to India: A Multifaceted Supply Chain Situation**
Apple has recently pointed out that a considerable share of iPhones sold in the U.S. is now assembled in India. However, this transition does not indicate a significant decrease in Apple’s dependence on China. Patrick McGee, a specialist in Apple’s operations in China, offers insights into the effects of this change.
Over the last two quarters, Apple CEO Tim Cook has stressed that iPhones sold in the U.S. are derived from India. This tactical shift allows Apple to bypass tariffs placed on products shipped from China to the U.S. However, McGee cautions against viewing this as a total transformation in production patterns.
The truth is that while assembly takes place in India, a major portion of the components and parts required for iPhones continues to come from China. McGee highlights that the detailed and vast supply chain that Apple depends on remains predominantly intact. Moving a significant fraction of this supply chain out of China would demand considerable investment and time, potentially amounting to billions and causing friction with Chinese authorities and consumers.
To elaborate, each iPhone comprises roughly 1,000 parts that undergo various manufacturing processes throughout numerous factories in China, engaging millions of workers each year. Once these components are ready, they are sent to India for final assembly and packaging, involving tens of thousands of workers.
The current strategy of assembling iPhones in India primarily serves as a means to avoid tariffs, for both the Indian and U.S. markets. Although this method has proved effective for now, the possibility of future tariffs on products exported from India to the U.S. poses a continual threat. Recently, President Trump suggested plans to increase tariffs on India regarding unrelated matters, leading India to label these proposed tariffs as “unjustified and unreasonable.”
Looking forward, Apple is also expected to hike the base prices of several iPhone 17 models in the forthcoming product launch, which may further affect consumer perceptions and market dynamics.
In conclusion, while Apple’s assembly activities in India are significant, they do not represent a fundamental shift away from the China-centric supply chain that supports its production. The complexities of global manufacturing and geopolitical considerations will continue to shape Apple’s strategies in the future.
