What Apple’s huge wager on India means for the tech large’s future

It took seven years for Tim Prepare dinner to go to India once more after touring to the fast-growing nation in 2016. In April, the Apple CEO visited New Delhi and Mumbai to open two flagship shops, one in every metropolis.

“Apple CEO Tim Prepare dinner really traveled to India earlier this 12 months to be in attendance for the opening of these two shops out in India, largely due to the huge alternative that he sees out in India,” stated Angelo Zino, a senior analyst at CFRA Analysis. “In lots of respects, we’re believers that India goes to signify the same alternative to China, and so they additionally type of signify very related markets in nature.”

Apple has been manufacturing older fashions of iPhones in India since 2017. In 2022, the corporate started making the iPhone 14 in India, which was seen as an enormous shift in its manufacturing technique. That 12 months, about 3.5% of the world’s iPhones had been made in India. Apple finally needs to fabricate 25% of the world’s iPhones there. 

“The most important issue behind Apple’s determination to diversify their manufacturing was they noticed the impression of a few of these disruptions in China that needed to do with their Covid zero coverage and a recognition of how susceptible they had been in the event that they did not have type of a broader provide base,” stated Willy Shih, professor of administration follow at Harvard Enterprise Faculty. “With out that broader provide base, that they had manufacturing shortfalls which impacted their gross sales, which they may not have suffered as a lot had that they had a number of sources.”

Shifting extra iPhone manufacturing from China to India feels like a good suggestion on paper. In the actual world, it is plagued with severe challenges — discovering expertise, constructing out infrastructure and navigating a patchwork of laws. Apple declined CNBC’s request for remark. 

Watch the video above to seek out out why Apple is betting on India and the challenges it faces because it slowly shifts its manufacturing base from China to India.