Apple started assembling some of its devices in India and Vietnam a few years ago. According to analysts at JP Morgan, the two nations are going to become key global manufacturing hub.
In a report they sent to clients Wednesday, JP Morgan analysts said Apple will move 5% of global iPhone 14 production to India by late 2022.
According to the report, Vietnam will contribute 20% of all iPad and Apple Watch productions, 5% of MacBook and 65% of AirPods by the year 2020.
The analysts said that India is a good location for manufacturing due to the presence of foreign production giants.
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One of the largest factories in the country has been set up by the Korean company. A number of Chinese phone makers assemble their phones in the country, includingXiaomi, which is currently leading the market.
According to The Information, some of the production of the Pixel phones will be moved to India. For the past two generations, the company did not ship flagship models in India.
Even though Apple has a tiny market share in India, it has invested more in the country in the last five years. Two years ago, it opened its online Apple Store in the country and is currently working to open its first physical store in the nation.
The analysts estimated that there are over 20,000 operators in India for the Apple product, compared to 350,000 in China.
India has historically supplied only legacy models of the Apple product. Apple wants to have the iPhone 14/15 models in India within 2 to 3 months of the start of production in mainland China. The report said that the shorter interval implied the increasing importance of India production and likely higher allocations to India manufacturing in the future
Due to the more complex camera module alignment of the iPhone Pro series and higher local market demand for the iPhone 14 series, we believe Apple only produces the Plus version of the device in India. The volume is expected to start small in 4Q22 with 1M units per month.
China and Taiwan will continue to gain market share due to better cost structures according to analysts.
Taiwanese EMS vendors are more focused on profitability and new areas such as EV and server. The report said Hon Hai should benefit from moving to India.
Mainland China-based production share should swing toward local vendors. The share in Vietnam is expected to be split between Taiwanese and mainland Chinese.
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