In addition to manufacturing iPhones, Apple has also begun production of AirPods’ components in India. Bloomberg reports that Apple’s supplier Jabil is manufacturing components of AirPods at its Pune facility in western India and shipping them to China and Vietnam where they will be assembled.
Apple has been gradually shifting production out of China to India, Vietnam, and other South Asian regions to reduce reliance on the country. Political tensions between Washington and Beijing and the country’s policies have created severe production challenges and supply chain constraints. So much so, the shipments of iPhone 14 Pro models were significantly reduced in the last Holiday season which is likely to impact Apple’s earnings for the quarter.
Although it will take a long time for the Cupertino tech giant to diversify out of China because 98% of iPhone production is based in China, the company is taking small steps to make it happen.
In the future, AirPods might be assembled in India
Previously, Nikkie Asia reported that Apple was going to manufacture AirPods and Beats headphones in India as soon as early 2023, for the first time. Now, we know that the tech giant has started manufacturing wireless earphones components in the country.
According to the report, the increase in Apple’s production share in India is accredited to the policies of Indian Prime Minister Narendra Modi which are facilitating the growth of the country’s manufacturing sector by providing “financial incentives for local production of wireless earphones and smartwatches”.
While India is still some time away from getting Apple to fully manufacture AirPods locally, New Delhi has given initial clearances to more than a dozen of its Chinese suppliers to ramp up via joint ventures with Indian partners. Luxshare Precision Industry Co Ltd., one of Apple’s Chinese suppliers which makes AirPods, is among the companies gaining that approval. Luxshare in 2020 agreed to take over a shuttered Motorola plant in India’s southern Tamil Nadu state, but is yet to begin manufacturing Apple products locally.
Recently, Indian trade minister Piyush Goyal said that the tech giant was going to increase its production share in the country up to 25% from the current 5% to 7% at a conference promoting India as a competitive manufacturing destination.
Neil Shah, vice president of research at Counterpoint believes that the production of AirPods components in India is a major milestone for the country and a sign that the tech company’s suppliers are probably gearing up to start assembling the wireless earphones locally.
“Making enclosures is typically the first step for full- fledged production of AirPods. Now that Apple has won initial approval for some suppliers including Luxshare, they are obviously building a supply chain for the end product.”