Apple Moving Production to India Carries 'Potential Geopolitical Risks' h1p1l Ming-Chi Kuo

For Apple, Vietnam is believed to have a better production environment over India. k4u57

By Jagmeet Singh | Updated: 25 May 2022 14:24 IST

Apple Moving Production to India Carries 'Potential Geopolitical Risks': Ming-Chi Kuo

Photo Credit: Reuters 3v6d2p

Apple has been producing iPhone models in India since 2017

Highlights

Apple is reportedly in plans to reduce manufacturing in China
AirPods Pro 2 is said to be manufactured in Vietnam
iPhone manufacturing in India on a large scale is still seen challenging

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Apple has been seeking to expand its production in India for some time. It is essentially aimed to reduce its dependency on China. But reputed market analyst and one of the most active commentators on Apple developments Ming-Chi Kuo has now said that the move to shift its manufacturing operations to India carries "potential geopolitical risks." The TF International Securities analyst predicted that setting up facilities in Vietnam over India could reduce the risks and be a better option for the Cupertino company. Kuo also suggested that the ongoing issues in China might delay some products.

In a thread on Twitter, Kuo pointed out that setting up production in India could involve potential geopolitical risks for Apple's contract manufacturers in China including Luxshare ICT and Goertek that can be reduced by establishing facilities in Vietnam.

The diplomatic spat between the Indian government and its Chinese counterpart is something that could restrict Apple from expanding its manufacturing in India.

Kuo also noted that Vietnam has a better production environment than most countries outside China.

China's authoritarian Communist government and its clashes with the US are some of the potential reasons for Apple to look for an alternative. However, the consideration to move to a new country for manufacturing stepped up this year after Beijing's move to refrain from opposing Russia's invasion of Ukraine and ongoing lockdowns, as reported by The Wall Street Journal, citing people familiar with the development.

Quoting the report from the business daily, Kuo said that the rumoured to arrive on Apple products in 2023 to comply with the EU's push for a universal charger standard.

Kuo, however, noted that it was very challenging to duplicate the successful experience of AirPods Pro 2 to other products or countries in the short term. The analyst also pointed out that Apple's shift of the AirPods Pro production could be attributed to the relatively not complicated supply chain. This suggests that the development could not be seen as a move to shift out of China for products including the iPhone models that require very complex input supply chains.

Apple has been iPhone 13 was confirmed as the latest model to be manufactured in India.

However, to expand that production process, experts believe that Apple looks for a stronger domestic market for the iPhone and other Apple products as well as policy-side improvements that are more friendly for local production and exports.

In April, CyberMedia Research stated that Apple Android phones exists in the market to limit the attraction of iPhone models for the masses.

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