Foxconn Technology Group will begin mass-producing the iPhone X in India this year, a strategic move for the manufacturing firm that has historically concentrated production in China.
Foxconn’s relocation marks a tactical change for Apple, which has previously concentrated iPhone manufacturing efforts in China
Speaking at an event in Taiwan on April 15, Foxconn Chairman Terry Gou said that Prime Minister Narendra Modi had invited him to India as the company prepares to shift iPhone manufacturing there.
Foxconn currently has two assembly sites in India, one located just south of Chennai and the other on the outskirts of Coimbatore, where it makes devices for Xiaomi and Nokia. According to a report by Bloomberg, the company will trial production of the iPhone X at its Chennai factory before launching a full-scale manufacturing operation.
Foxconn’s relocation also marks a tactical change for Apple, which has previously concentrated iPhone manufacturing efforts in China. However, competition from local firms such as Huawei, together with on-going trade tensions between China and the US, has forced the company to examine alternatives.
India is the fastest-growing smartphone market in the world, but technology manufacturers have shunned it in favour of China due to higher US import duties on India products. It appears that Apple has weighed the balance of probabilities and decided that India is a more fruitful option, despite these levies.
A slowdown in the Chinese economy, in comparison to Modi’s drive to boost Indian production, will have also played a part in that decision. The prime minister’s Make in India campaign has faltered in a number of areas, but smartphone production has shown strong growth, with 450,000 jobs created in the mobile industry between 2014 and 2018.
“In the future we will play a very important role in India’s smartphone industry,” Gou said at the Taiwan event. “We have moved our production lines there.”
He added that the company is in discussion with the Indian government with regards to investment. Foxconn currently has a dozen software experts in India, and plans to increase that figure to 600, Gou said.
It’s not yet clear what impact Foxconn’s move will have on Apple’s China operations, although it is likely to worsen the economic stagnation the country is facing. It will also impress upon the Chinese government the importance of repairing its trade relationship with the US, lest it lose a substantial proportion of its manufacturing sector to India or other countries.