Apple accelerating move to India, says J.P. Morgan

From Reuters' "Apple may move a quarter of iPhone production to India by 2025" posted early Wednesday:

Apple may make one out of four iPhones in India by 2025, J.P.Morgan analysts said on Wednesday, as the tech giant moves some production away from China, amid mounting geopolitical tensions and strict COVID-19 lockdowns in the country.

The brokerage expects Apple to move about 5% of iPhone 14 production from late 2022 to India, which is the world's second-biggest smartphone market after China.

It is also estimating about 25% of all Apple products, including Mac, iPad, Apple Watch and AirPods, to be manufactured outside China by 2025 from 5% currently...

"Taiwanese vendors such as Hon Hai and Pegatron play a key role in the relocation to India. In the medium to long term, we also expect Apple to qualify local India manufacturing suppliers," according to J.P.Morgan analysts led by Gokul Hariharan, who is rated 4 out of 5 for estimates accuracy.

A Bloomberg report said earlier this month that Indian conglomerate Tata Group was in talks with Wistron to establish a joint venture to assemble iPhones in the country amid Apple's plans to cut production lag with China.

My take: I've asked my J.P. Morgan contacts to see a copy of the note. Gokul Hariharan is new to me. According to TipRanks, he hasn't written about Apple since 2020.


  1. Gregg Thurman said:
    Manufacturing diversification is good, especially when the primary is a totalitarian government bent on world domination.

    September 21, 2022
  2. Jerry Doyle said:
    This movement toward diversification of Apple’s supply chain operations goes beyond its need to qualify local India manufacturing suppliers to responding in the wake of the immigration order (I believe in 2017) signed by the previous administration’s president with overt plans to attack American businesses that outsourced to China and to return portions of that supply chain to the U.S. Tim Cook has threaded that geo-political needle quite well since through multiple company announcements of moving $350B direct contribution to the US economy over five years (2018-2022) along with the addition of 20,000 American jobs. It was in a press release by Apple on January 17, 2018. No matter domestic politics, Apple continues to diversify its manufacturing to multiple foreign countries to take advantage of cheaper labor and supply of workers. Vietnam is another excellent manufacturing base ramping up fast.

    September 21, 2022
  3. It’s more noble to cite lockdowns, geopolitical tensions, the Uighur problem, and threats to Taiwan as reasons to relocate manufacturing to India.
    India’s average hourly rate for semi-skilled factory work is $2.50. Overall hourly rate is $1.25.
    China’s average hourly rate for semi-skilled factory work is $5.50. Overall hourly rate is $2.50. Starting min wage is $1.60.
    To gain any access to the vast Indian market the government requires domestic production.
    The Indian middle & upper classes (car or motorcycle, home, newer cell phone, refrigerator, kids in private schools) are larger than the entire US pop.
    Those are major reasons to attempt to breach India’s formidable markets.

    September 21, 2022
  4. Bart Yee said:
    For India production, 5% of iPhone production for 2022 would be 5% x ~230M = 11.5M units.

    Statista research suggests Apple sold 5.4M iPhones of various models in India for 2021 and those would be the “Make in India” versions mostly? According to story, Apple sold 1.2M iPhones in CY2022 Q2 in India (a 94% YOY increase), 1M (83%) being Make in India versions.

    I think Apple and Cook are expecting great things from the India market (which is included in Apple’s Euro segment, not Rest of Asia, head scratcher there). Diversifying the supply chain to India is yet another prescient step. If they never have enough for export, oh well, c’est la vie!

    September 21, 2022
  5. Jeff Galanti said:
    By almost any measure, India should be a trading partner and ally having a relationship similar to ours with Japan, Great Britain, Israel, Germany, etc. But their protectionist policies and their bent toward Russian weapons and geopolitical alignment, a relic of their alignment during the Cold War, make them such an unusual case. They would be so much better off to open up their markets and to switch to US weapons systems and geopolitical alignment. I have never seen a good argument to why this is but it seems to be fairly intractable.

    September 21, 2022
    • David Emery said:
      A switch away from Russian weapons would be very expensive for India, both for materiel and training. That being said, I expect to see a market emerge for countries like Poland, Slovakia and even Ukraine selling logistics support and upgrades for Russian weapons.

      September 21, 2022
  6. Lalit Jagtap said:
    “A deeper look at Indian actions, however, suggests an altogether different reality. India is not backing Russia’s invasion, nor is it simply balancing between two major powers. Instead, a subtle but major shift is underway: India’s slow but inevitable decoupling from Russia.” quote from todays reporting at foreignaffairsdotcom/india/russia-losing-india. It provides valuable insights about what’s happening between India and Russia, specially in last 10 years wrt to defense purchases.

    September 22, 2022

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