In the wake of the novel Coronavirus pandemic, which has significantly disrupted production and supply lines for tech companies, Apple, according to industry reports, is looking to move a sizeable portion of its production from to India from China. The move, analysts say, could potentially make the tech giant India’s largest exporter.
The iPhone maker is apparently considering making up to $40 billion worth of smartphones over the next five years through manufacturers Wistron and Foxconn, according to a report in the Economic Times, citing a government official.
In December last year, Indian Prime Minister Narendra Modi had met senior executives of Apple, Samsung, and domestic phone manufacturer Lava to initiate the process.
“India isn’t a big market for Apple as the company sells only a fraction of its total output in India. It is actually looking at India as a base to manufacture and export, essentially diversifying its production out of China,” the Economic Times quoted an official as saying.
The tech giant sells phones worth about $1.5 billion in India, of which a third or about $500 million is made locally. To view it in perspective, Apple in 2018-2019 manufactured about $220 billion worth of merchandise in China, with $185 billion of that exported.
Earlier, at the end of April, on an earnings call covering the second fiscal quarter of 2020, Apple CEO Tim Cook had said that Apple was continuing to operate under the circumstances — of the global pandemic — and that Apple employees were getting used to the new mode of working from home. “In some areas of the company, some people may be even more productive,” he said, adding, “In some areas, not as productive. It’s mixed depending on what the roles are.”
Referring to innovation, Cook said that Apple employees were committed to working as usual. “New products are our lifeblood. We’re continuing to work. As you can tell from what we did this quarter despite the environment, we have our heads down and are working because we know our customers want the products that we’ve got. They’re even more important in these times.”
Referring to Apple’s supply chain and how well it was equipped to launch traditional fall products, Cook said that Apple’s products were manufactured everywhere rather than focussing on the final assembly of the manufacturing process. “We have to conclude that if you look at the shock to the supply chain that took place this quarter, for it to come back up this quickly really demonstrates that it’s durable and resilient. I feel good about where we are. That said, we’re always looking at tweaks, it’s just not something we talk about,” Cook said.
In his remarks, Cook added that Apple was also going to “look to see” what could be learnt from the current situation and how that could be used to usher in substantive change after Apple gets “totally out of this”.