In recent years, Apple has tried to reduce risks by diversifying its supply chain. One key strategy has been moving some production orders to India. However, this shift faced many hurdles, especially with the assembly of the iPhone 15. These issues led Apple to move part of its production back to mainland China. This article looks into the details and outcomes of this change.
Last year, Indian factories had major issues during the assembly of the iPhone 15. Due to quality problems, many products were returned. This forced Apple to cut prices. The issue was so severe that Apple CEO Tim Cook visited China to adjust the supply chain.
In response to these setbacks, Apple adjusted its strategy this year. Part of its production moved back to mainland China. Industry giants like BYD and Luxshare Precision are now part of the iPhone 16 supply chain, becoming new partners for Apple.
Foxconn in India
Foxconn’s base in Sriperumbudur, India, started making the iPhone 15 series in August 2023. The goal was to shorten the shipping time difference between India and China and sync the supply chains of both places. The Indian factory closely followed its Chinese counterpart, supplying iPhone 15 series phones to the global market with only a few weeks’ difference.
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Despite these efforts, Indian factories still face many problems. They rely heavily on parts from mainland China, which affects both quality and efficiency. Also, Indian factories have low iPhone yield rates (only about 50%) and hygiene issues, including high E. coli levels. These problems hurt product exports to Europe and mainland China, impacting sales.
Due to these issues, Apple cut prices and promoted sales to lessen the impact. This move shows the difficulties Apple faced in keeping quality and efficiency in its Indian production sites.
Future Implications
Apple’s strategy change shows a big shift in its supply chain. While the initial push to diversify and reduce dependence on China faced hurdles, the company’s quick response and resource shift show its adaptability. By strengthening ties with established partners like BYD and Luxshare Precision, Apple aims to ensure stability and maintain high-quality standards for its products.
Conclusion
Apple’s attempt to diversify its supply chain by moving production to India faced big challenges, leading to quality issues and reduced efficiency. In response, Apple moved a large part of its production back to mainland China, partnering with industry giants to stabilize its supply chain. This shift highlights the complexities of global supply chain management and shows Apple’s commitment to maintaining high-quality standards for its products.
