apple's recent plans to expand iPhone production in India have had a major impact on component suppliers in China. According to the South China Morning Post, the shares of Chinese companies involved in all of Apple's devices have already fallen in response to the move. Goertek, a component supplier, lose AirPods orders as expansion knocks profit forecasts 60%. Camera parts maker Ofilm also stopped all orders because Apple was placed on the U.S. sanctions list for human rights violations, resulting in a sharp drop in sales and profits.
The move by Apple is part of a larger strategy to diversify its supply chain and reduce its reliance on China. The company has been facing increasing pressure from the U.S. government to move production out of China, as well as rising labor costs and U.S.-China trade tensions. India, on the other hand, offers an abundance of skilled labor and a pro-business government eager to attract foreign investment. Also, India has a huge smartphone market, and by producing devices locally, Apple can avoid import duties and increase its market share in India nation.
It should be noted, however, that while iPhone shipments in India doubled between April 2022 and December 2022, they still account for less than 5% of the total. Nonetheless, a Taiwanese analyst predicts that India's production could increase to 50% of all iPhones by 2027. This The forecast is in line with earlier forecasts by JPMorgan analysts who estimated that 25 percent of all iPhones will be manufactured in India by 2025.
As production of iPhones and other Apple products in India continues to grow, the impact on Chinese suppliers is likely to continue to be significant. Chinese suppliers that have so far relied largely on Apple as a major customer will have to find new customers to compensate Lost Apple orders. This could lead to the decline of the Chinese component industry and the rise of the Indian component industry.