India Scores More Wins At The Cost Of China; Apple AirPods, Beats Production Could Soon Shift To The Country

India Scores More Wins At The Cost Of China; Apple AirPods, Beats Production Could Soon Shift To The Country
  • Apple Inc AAPL urged suppliers to move some AirPods and Beats headphone production to India for the first time.
  • The move marked Apple's gradual diversification from China as it looks to downsize exposure to supply chain disruptions stemming from the country's strict zero-COVID policy and tensions with the U.S.
  • Apple talked with multiple suppliers about increasing production in India, including crucial acoustics devices, as early as next year, Nikkei Asia reports.
  • iPhone assembler Foxconn Technology Co, Ltd FXCOF is prepared to make Beats headphones in the country and hopes to produce AirPods there as well eventually.
  • Luxshare Precision Industry and its affiliates, which already produce AirPods in Vietnam and China, also plan to help Apple make the popular wireless earphones in India.
  • The report added AirPods were one of the earliest Apple products to be mass produced outside of China, with production shifting to Vietnam in 2019 amid fallout from the U.S.-China trade war. 
  • Apple initially decided to manufacture in India to serve the massive local market. Apple now developed the country as a strategic production base, with exports likely for markets like Europe.
  • India earmarked $30 billion to strengthen its electronics supply chain further to attract more investment.
  • The report cited Joey Yen, a tech analyst with IDC, who believes India would emerge as a critical alternative for electronics production outside China thanks to its young engineering talent, a significant workforce, and massive domestic market as a foundation.
  • Apple iPhone exports from India crossed $1 billion in the five months since April.
  • At the current rate, outbound shipments of India-made iPhones, mainly to Europe and the Middle East, will likely reach $2.5 billion in the 12 months through March 2023.
  • Beyond smartphones, India charted out plans to boost the financial incentives for tablet and laptop makers.
  • Price Action: AAPL shares traded lower by 0.86% at $144.84 in the premarket on the last check Wednesday.

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