Apple's Move To India Has 'Potential Geopolitical Risks,' Ming-Chi Kuo

Apple has been looking to increase its manufacturing in India, for some years. Its primary goal is to lessen its reliance on China.
Apple's Move To India Has 'Potential Geopolitical Risks,' Ming-Chi Kuo
Apple's Move To India Has 'Potential Geopolitical Risks

Apple has been looking to increase its manufacturing in India, for some years. Its primary goal is to lessen its reliance on China. Ming-Chi Kuo, a renowned market analyst and one of the most active observers of Apple developments, has recently stated that the company's decision to relocate its production operations to India includes "possible geopolitical dangers."

According to the TF International Securities analyst, establishing facilities in Vietnam rather than India might lower risks and be a preferable alternative for the Cupertino corporation. Kuo also stated that current challenges in China would cause some items to be delayed.

Production in India might pose geopolitical problems for Apple's contract manufacturers in China

Apple's contract manufacturers in China

Kuo said on Twitter that setting up manufacturing in India might pose geopolitical problems for Apple's contract manufacturers in China, such as Luxshare ICT and Goertek, which can be mitigated by building facilities in Vietnam.

The diplomatic disagreement between the Indian government and its Chinese counterpart may prevent Apple from expanding its manufacturing operations in India.

Kuo also stated that Vietnam has a superior manufacturing environment to the majority of countries outside of China.

Apple may seek an alternative due to China's repressive Communist regime

Apple

Apple may seek an alternative due to China's repressive Communist regime and its disputes with the United States. However, the notion of moving production to a new nation increased this year following Beijing's decision to desist from criticizing Russia's invasion of Ukraine and continued lockdowns, according to The Wall Street Journal, citing people familiar with the situation.

Apple's big product mass manufacturing outside of China

Image Credit: Getty Images

According to a rumor from the business daily, the AirPods Pro 2 will go into mass manufacturing in Vietnam in the second part of the year. It is regarded as a successful instance of Apple's big product mass manufacturing outside of China.

He also stated that the AirPods Pro 2 will keep the Lightning connector port rather than the USB Type-C port, which is expected to appear on Apple devices in 2023 to comply with the EU's demand for universal charging standards.

Kuo, on the other hand, emphasized that replicating the successful experience of AirPods Pro 2 to other goods or nations in the immediate term would be extremely difficult. The analyst also stated that Apple's decision to move AirPods Pro production might be related to the relatively simple supply chain.

This means that the trend cannot be seen as a movement away from China for items such as iPhone models that require extremely complicated input supply chains.

Apple has begun producing several iPhone models in India

Since 2017, Apple has begun producing several iPhone models in India as part of its goal to reduce its dependency on China and meet the country's rising demand for non-flagship iPhones. The iPhone 13 was confirmed as the newest model to be manufactured in India last month.

However, analysts think that Apple is looking for a bigger domestic market for the iPhone and other Apple goods, as well as governmental changes that are more favorable to local production and exports, to extend that production process.

According to CyberMedia Research, Apple supplied a million locally built iPhone devices in the first quarter. The market has the ability and size to increase that figure. However, there is an army of Android phones on the market to reduce the appeal of iPhone models to the public.

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