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As Apple continues to lessen its reliance on China as a manufacturing hub, more expensive iPhones are now being produced in India.
Apple has started a three-stage process to move some of the production of its flagship iPhone from Foxconn in China to Luxshare in India.
Background
Apple has long known that it needs to reduce its reliance on China as a manufacturing hub, but the effects of the pandemic at the largest iPhone assembly plant in the world brought the issue into sharp relief. According to estimates, the COVID-19-related outage cost the business $1 billion each week.
Foxconn, Apple’s primary iPhone manufacturer, started building two new iPhone plants in India earlier this week, and new government incentives mean that iPad production is also anticipated to start there soon.
More expensive iPhones are being produced in India.
According to a recent investment note from Apple analyst Ming-Chi Kuo, the Cupertino corporation is expanding its high-end iPhone model production in India and diversifying its suppliers. From a secondary to a top-tier supplier, Apple has elevated Luxshare of China to compete with Foxconn.
First, more iPhone orders, including those for premium models, are now being sent to Luxshare.
Apple has transferred some iPhone 14 Pro Max orders to Luxshare for risk diversification after the Foxconn Zhengzhou incident in November 2022. Luxshare’s production yield improvement schedule for the iPhone 14 Pro Max is better than expected, so the company has been awarded the iPhone 16 Pro Max assembly NPI for 2024.
NPI, or new product introduction, denotes the company’s newfound belief in its ability to produce premium models during the product launch time. Prior to launch, when yield levels are less important, Luxshare has only been given orders for flagship models.
This, according to Kuo, shows that Apple now fully trusts Luxshare and regards it as Foxconn’s equal.
Second, Luxshare will initially produce iPhone 15 Plus devices before adding the iPhone 15 Pro Max. As a result, the company’s production of iPhones would more than quadruple, rising from 20–50 million units last year to 45–50 million this year.
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Third, Luxshare will actually receive more prestigious orders in 2024 than Foxconn for the manufacture of the iPhone 16 in India. According to Kuo, the division of Indian iPhone assembly orders is as follows:
- Foxconn: iPhone 16 & iPhone 16 Pro
- Luxshare: iPhone 16 Pro Max
- Pegatron: iPhone 16 Plus
It has been said in the past that Luxshare, which purchased two iPhone manufacturing facilities from Wistron, lacks experience negotiating the political hurdles frequently associated with obtaining the required permits for new factories. At the local, regional, and federal levels, permits are frequently necessary.
Kuo claims that Apple will reportedly help Luxshare with this procedure.
Apple assisting Luxshare to set up production facilities
It has been said in the past that Luxshare, which purchased two iPhone manufacturing facilities from Wistron, lacks experience negotiating the political hurdles frequently associated with obtaining the required permits for new factories. At the local, regional, and federal levels, permits are frequently necessary.
