Electronics Giant Spends $1B as Apple Sours on China

 

A recent report on AppleInsider.com says that contract manufacturer Foxconn’s decision to invest up to $1 billion to upgrade a production facility in India could be tied to requests from one of its largest customers: Apple.

Apparently, the folks from Cupertino are making "suggestions" to a number of iPhone supply chain partners that investigating sourcing and production options outside the People’s Republic of China might not be a bad idea.

While rumors have persisted for years about Apple’s preferences lying outside of China, an escalation of the U.S. trade war, rising tensions in Hong Kong, and the country’s role as the epicenter of the coronavirus pandemic may have been the final pushes needed for both Apple and its suppliers to start putting plans into action.

With Apple apparently whispering in its ear, Foxconn could be looking to expand operations at an Indian plant currently responsible for iPhone XR production. The expansion would potentially take place over the next three years in order to accommodate future iPhone models. 

In addition to the $1 billion investment, the move would impact an estimated 6,000 jobs.

The move to India would also offer a competitive advantage for Apple — the country is seen as the world's second-largest smartphone market, trailing only China and outpacing the U.S. 

Currently, iPhones hold a market share of about 1% in India. China’s Xiaomi holds the top spot. 

Growing production in India would also help Apple cut costs and avoid certain tariffs as it looks to compete with lower-priced devices.

India has reportedly offered a number of tax breaks and other incentives to help lure tech companies to the country.

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