July 27, 2021

Apple diversifies its production in India

The first iPhone XR models assembled by Foxconn in India are now available, Wall Street Journal reporter Newley Purnell confirmed with a photo of a model still packed posted on Twitter. Last April, Foxconn CEO Terry Gou officially confirmed that his company would start manufacturing iPhones in India as early as 2019. Apple already had small production lines in India thanks to its partner Wistron, but Until now, it was only about producing entry-level models (iPhone SE, iPhone 6s and iPhone 7) intended for the local market. With the iPhone XR, Apple is starting to move upmarket.

This increased presence of Apple in India is not a surprise. The production needs for the local market are not very important at the moment – although very populated, this country does not have a great purchasing power and the market shares of Apple in India are catastrophic – even if we imagine that Apple wants to raise the bar. Apple, on the other hand, intends to take advantage of a workforce that is cheaper than in China and advantageous tax policies. And above all, in an extremely tense geopolitical context between the United States and China, Apple is seeking to reduce its dependence on China and the expansion of its production capacities in India could represent a valuable safety net in the event of implementation. instead of excessive customs taxes for Chinese exports on American soil.

It was one of the summer soap operas: were the United States going to tax the iPhone up to 10% as of September? The implementation of this customs tax was finally postponed to December 15 … but the percentage could finally increase to 15%. These customs taxes are regularly used by the US administration as a negotiating tool against China, and no one really knows if the iPhone will be taxed in December. Either way, companies don’t like uncertainty, especially when it comes to their flagship product: Apple is expected to take more such steps in the coming years.

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