Efforts to localize iPhone production in India have shown significant results in recent years, as the country is now responsible for assembling one in seven Apple smartphones in the world, and the latest generation of iPhones will begin production here this year. At the same time, the recent fire at the Tata Electronics plant may force Apple to increase the volume of orders for iPhone production in China.
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Sales are traditionally held in India from late October to early November, and such disruptions in the supply of components for assembling the iPhone for the local market may force Apple partners to turn to their suppliers with factories in China. According to Counterpoint Research analysts, the incident at the enterprise in India will force Apple’s local partners to reduce production volumes of previous generation iPhone models by 10-15%. The company will probably have to compensate for these losses by sourcing components from outside India.
Tata reportedly supplies iPhones to the Netherlands, the United States, and also ships components for their production to some regions of China, totaling more than $250 million a year. Typical component inventories last for four weeks of work, but Apple could have had an eight-week supply, so the consequences of the fire at Tata’s Indian plant would not immediately affect its operations. At the Chinese enterprises of Apple contractors, additional shifts or even new lines may be introduced if Indian partners experience a shortage of components.
The development of Apple device production in India faces certain difficulties. For example, last year, Foxlink and Pegatron enterprises in India were damaged by fires; during the investigation it turned out that in the first case, the installed fire extinguishing systems were mostly faulty. Strikes also occurred at Wistron and Foxconn factories, interfering with their smooth work. Tata is relatively new to iPhone production; last year it was responsible for supplying 12-14% of Apple smartphones assembled in the country, and this year the figure will rise to 20-25%. It’s difficult to say whether the company will be able to assemble iPhones in the building next to the one that burned down. Tata has two other iPhone manufacturing facilities in India. One way or another, it turns out that every Apple partner in India faces certain problems.