Apple previously shifted its focus from China to India for the production of iPhones. According to a report from Bloomberg, the company has produced $14 billion worth of iPhones in India over the last fiscal year. However, the latest report claims that Apple has shifted its focus back to China for the manufacturing of the iPhone 16 series.
For those unfamiliar, Apple works with Foxconn (a Taiwanese contract manufacturer) to produce iPhones. Now Foxconn has started large-scale recruitment in one of its factories in China, which has aroused the industry’s attention to Foxconn’s return to the country. The company also plans to invest 1 billion Yuan (approximately 140 million USD) in Zhengzhou (a city in China).
It is noted that Foxconn’s return to China is not accidental. The shift offers a number of benefits to production such as more skilled workers, a better supply chain, and overall infrastructure, which should improve the yield rate. It’s reported that the iPhone 15 series assembled in India has a yield rate of only about 50%.
Speaking of the supply chain, Apple still had to import parts from China to manufacture its products in India and Vietnam. The high transportation costs increase the overall production cost of iPhones.
The power supply infrastructure in India and Vietnam is also relatively poor as compared to China. As a result, factories more often have to face power cuts which hinders production capacity and efficiency.
As the deputy director of the South Asia Research Center of the Institute of Asia-Pacific and Global Strategy of the Chinese Academy of Social Sciences, Liu Xiaoxue said, China has a complete industrial chain and supporting system, coupled with a high-quality workforce and perfect infrastructure, including a stable power supply, providing a mature production base for global multinational companies.
(Source)
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