BEIJING, December 8 (TMTPost)— Apple Inc. is moving more iPhone-related production to India, as part of efforts to diversify its global supply chain away from China.

Credit：Visual China

Apple has informed component suppliers about its preference to source batteries of the upcoming iPhone 16 from facilities in India, the Financial Times reported. Battery makers such as Huizhou Desay Group Co.,Ltd., a manufacturer based in Southern China’s Huizhou city, have been encouraged to set up new factories in India, and Simplo, a Taiwanese supplier, has been urged to scale up production capacity in the country to meet future orders, the report cited people familiar with the plans. "If all goes well with iPhone 16 battery supply, Apple plans to move more iPhone battery production to India," said one source.

An Indian official just announced a progress in iPhone production in the developing economy. Japanese electronic parts maker TDK Corp will be producing lithium-ion battery cells for Apple iPhones in India, and is building a 180-acre facility in in Manesar, in the state of Haryana, in southern India, accordng to a post on social media X by Rajeev Chandrasekhar, India's minister of state for electronics and IT. The minister called TDK’s move “another big win” Indian Prime Minister Narendra Modi’s visionary Production Linked Incentive (PLI) scheme in shifting the mobile manufacturing ecosystem to India.

Apple announced in April 2022 to commerce making iPhone 13 in India, which seems as one of signs to highlight increasing importance of countries like India, Vietnam and Mexico for suppliers who try to improve diversification of production away from China. Five months later, Apple confirmed it was assembling iPhone 14 in India, less than three weeks from its release of the new iPhone series. The confirmation effectively admitted India first made the latest flagship iPhone. 

Indian official has suggested Apple’s ambitious plan for production shift. Apple has already made about 5% to 7% of its production in India, and “If I am not mistaken, they are targeting to go up to 25% of their manufacturing, Piyush Goyal, the Commerce and Industry Minister, said in January. News earlier this year have showcased Apple’s ongoing shifting efforts.

Apple seeks to make India a center to manufacture iPhones and accessories, Vietnam to assemble AirPods and Mac, Malaysia as a location for some Mac production, and Ireland to make a range of simpler products, according to tech reporter Mark Gurman. Apple employees have been instructed to focus on sourcing additional parts and local production lines beyond China for new offerings coming in 2024, but the company still plans to maintain existing operations in China, Gurman reported in April.

Apple plans to move at least 20% of iPhone production to India, Nikkei News reported in the beginning of August. The Japanese newspaper said Apple aims to manufacture 15 million iPhone units this year in India, including iPhone 15 series, and the output more than doubles its target a year earlier.

If all goes well, the proportion of iPhones made in India will increase to 20% to 25% by 2024, up from 12% to 14% of global shipments this year, according to TF International Securities analyst Ming Chi Kuo, who was well known as the most accurate Apple analyst in the world. In his note at the beginning of November, Kuo noted the new product introduction (NPI) for standard iPhone 17, which was set to be launched in 2025, will kick off in India in the second half of 2024. If the NPI effort were correct, that would be the first time for Apple to start development of a new iPhone model outside China. Kuo added that the reason that Apple chose the standard iPhone17 is to reduce design risk as such version is less difficult in design development.

Foxconn, Apple’s largest iPhone maker, said late November that it will invest US$1.541 billion in a construction project in India to fulfill its operational needs. Foxconn chairman and CEO Liu Young-way, or Yong Liu months earlier denied Apple’s plan to shift away from mainland China. Responding to a reporter’s question about Foxconn’s move to de-risk at the Summer Davos Forum in June, Liu said the so-called de-risk is not de-capacity. He explained the move is to eliminate the risk of management in case of events like earthquake or windstorms, rather than the risk of capacity, therefore, its main goal is not de-risking, but the sustainable development of the company.