🍏 Apple Adds 8 Suppliers in China; Why? 50% India-Made iPhones “Not Good Enough”

Despite ongoing efforts to spread production across Asia, especially India, the tech giant recently added eight new suppliers in China.  China remains the undisputed kingpin in Apple's manufacturing network. According to a recent analysis, over a third of Apple's 187 disclosed suppliers have factories in mainland China. This dominance was highlighted by CEO Tim Cook's words last month, when he publicly acknowledged the critical role the country plays in Apple's supply chain. Apple's newly added suppliers include companies like Baoji Titanium Industry, an aircraft parts manufacturer, and San'an Optoelectronics, a display technology firm believed to be supplying mini-LED chips for Apple's premium devices. But it's not just China. Notably, Tata Electronics, a subsidiary of India's Tata Group, has also debuted on Apple's supplier list. This is a clear example of Apple's growing interest in India's manufacturing potential, where they are also planning to manufacture camera modules for iPhones.  But, while Apple has begun assembling high-end iPhones in India, the manufacturers here are struggling with a high defect rate, with only half the components meeting Apple's stringent quality standards. This falls far short of the company's zero-defect target. It's clear that China offers a well-established ecosystem of suppliers and manufacturers, making it difficult to replicate elsewhere. India, on the other hand, has potential but requires significant infrastructure upgrades and workforce training to meet Apple's exacting standards.  But moving away from China seems to be a no-brainer for Apple, especially after things have heated up between China and the USA. Not only this, but some Chinese companies and government agencies, mirroring US restrictions on Chinese apps due to security concerns, have limited employee use of Apple devices.  There's more, Apple saw a huge decline in iPhone sales in China during the first quarter of 2024. Sales fell 19% compared to the same period in 2023, which makes the company’s weakest performance in the country since the start of the COVID-19 pandemic. All these things should make it easy for Apple to expand outside China, but big investments and improvements in infrastructure and workforce skills are necessary before India can truly challenge China's dominance.  More here. ...