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Apple will manufacturing iPhone 14 in India by shift production from China’s pandemic restrictions

Apple Inc. will make some of its iPhone 14 in India, the company said, as manufacturers shift production from China amid geopolitical tensions and pandemic restrictions that have disrupted supply chains for many industries. “The new iPhone 14 series introduces groundbreaking new technologies and important security features. We are thrilled to be manufacturing iPhone 14 in India,” Apple said in a statement on Monday.

Apple unveiled its latest line of iPhones earlier this month. They will have improved cameras, faster processors and longer-lasting batteries at the same prices as last year’s models. India is the world’s second-largest smartphone market after China, but Apple’s iPhone sales are struggling to gain a large market share from cheaper smartphones from a number of Chinese brands.

The Cupertino, California-based company’s announcement coincides with Prime Minister Narendra Modi’s push for local manufacturing, a key goal of his government since he took office in 2014. The tech company first started manufacturing its iPhone SE in 2017 and has continued to manufacture a range of iPhone models here ever since. Apple opened its online store for India two years ago, but the pandemic has delayed plans for a flagship store in India, according to local media reports.

The latest model will be supplied by Foxconn, a major iPhone manufacturer whose facility is located on the outskirts of the southern Indian city of Chennai. Apple is likely to move about 5 percent of its iPhone 14 production to India from the end of this year and increase it to 25 percent by 2025. Analysts expect nearly a quarter of all Apple products to be made outside China by 2025, up from about 5% now. Supply chain risks such as severe COVID-19 restrictions in China are likely to be the trigger for such relocation efforts to continue over the next two to three years, the report said.

“Apple has been trying to diversify its supply chain for some time, but these efforts have increased in the past two years due to trade sanctions between the US and China,” said Sanyam Chaurasia, an analyst at Canalys. Last year, the tech giant produced around 7 million iPhones in India. The news is likely to significantly increase the number of Apple smartphones made in India, he added.

He said the plan to make more iPhones in India may also lead Apple to lower prices for the Indian market, making it more competitive. “If you’re manufacturing locally, you can adopt a more aggressive pricing strategy,” Chaurasia said. Most of Apple Inc’s smartphones and tablets are assembled by suppliers with factories in China, but the company began asking them in 2020 to look at moving some production to Southeast Asia or elsewhere after repeated shutdowns to fight COVID-19 disrupted its global product flow.

Apple has not released details, but reports say the company plans to set up an assembly plant for tablet computers and wireless headphones in Vietnam. Other companies are maintaining or expanding production in China to serve the domestic market while moving export-oriented work to other countries due to rising wages and other costs, as well as the difficulty of foreign managers visiting China due to the COVID-19 travel restrictions.

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