In 2019, Apple made a risky decision: to divert part of its production to India. Currently, around 5% of all iPhones in the world are made there. The aim is for three-quarters of all production to come directly from India. China remains the main partner, but supply chain delays and a restrictive zero COVID policy have left Apple stranded, “drowned.”
However, the factories in India do not meet the expectations of the Big Apple. In fact, the results are well below expectations. About half of the carcasses receive a mark rejection. “In a carcass factory in Hosur run by Tata, 50% of produced components are suitable to be sent to Foxconn, Apple’s assembly partner. But Apple’s goal is zero defects,” they report in the Financial Times.
Quality controls are now Apple’s nightmare
problems in the validation process, logistics, final quality, prices, infrastructure…although Apple wants to ramp up production, its expansive policy comes up against an uncomfortable reality. India is generally seen as a production driven market low cost and a more lax threshold in terms of quality. Unsurprisingly, the Asian giants reign fearlessly while Apple kneels every time it tries to sell a new iPhone.
But while Apple has failed to sell iPhones in India, it now wants to try making them there. And 2023 is the year of standardization. An approach which aims, in essence, to be more independent of China.
A desire that is not just an Apple affair. As Bloomberg reports, another partner such as AirPods maker GoerTec Inc. has invested $280 million in a new factory in northern Vietnam continue to provide services to Apple outside of China’s borders. And, like that, many others: “I would say that currently 90% of them (Chinese manufacturers) are considering this (like expanding into India),” says a GoetTec executive.
The problem lies in the how: that India is the new China is something that has been sung for at least a decade. An adage to which Apple will have to adapt, “because everything in India is an obstacle”when it comes to dealing with their government bureaucracy, as noted by businessman Vivek Wadhwa.
