The decision to choose India as the place to manufacture the iPhone 16e puts Apple at risk of high US tariffs and a shortage of skilled labor.
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| Apple's new iPhone line, the iPhone 16e, is being assembled in India. (Source: Reuters) |
According to the Economic Times , on February 20, Apple announced the release of the iPhone 16e model, a cheaper model in the iPhone 16 line, which will be manufactured in India.
Apple has chosen India as the place to manufacture the iPhone 16e (new low-cost iPhone line) as part of its efforts to reduce dependence on China.
Nikkei Asia commented that there are many reasons for Apple to decide to produce iPhones in India. First, this is where Foxconn - Apple's main partner, built an iPhone assembly plant.
Supply chain disruptions amid the Covid-19 pandemic have led to production shortages, prompting the company to diversify its manufacturing locations.
In addition, India is a potential market for the company. The stores have brought high sales for Apple. Experts predict that the market share of iPhones manufactured in India will increase from the current 15% to 25% by 2027.
The US's move to impose high tariffs has made diversifying production locations more important.
However, Apple is also having a "headache" because its production activities in India are facing many problems.
The tech company also faces the risk of higher tariffs from the US if India continues to pursue protectionist trade policies.
In addition, the lack of electricity and high-quality labor in this Asian country will make it take more time for Apple to move its production location.
Apple currently develops and designs its own products, but manufacturing and components come from other distributors.
Although iPhones are assembled in India, many key components are still made in China. According to a 2023 study, most of Apple's 187 major suppliers have factories in China.
Assessing the effectiveness of Apple's move to relocate iPhone production, experts say that manufacturing electronic components in India will be the next important step in Apple's strategy to reduce dependence on China.
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