Another China move? Apple reportedly in talks to begin making its AirPods and Beats headphones in India from 2023
Apple is to reportedly move some manufacturing of its audio products away from China, amid that country’s ongoing trade tensions with America and its strict zero-Covid policies.
According to a report by Nikkei Asia on Wednesday, Apple is asking suppliers to move some AirPods and Beats headphone production to India as early as next year.
Foxconn will reportedly make the Beats headphones in India and strive to produce AirPods there in the future. Meanwhile Luxshare Precision Industry (which currently makes AirPods in Vietnam and China) will also help with AirPods production efforts in India.
If this development is officially confirmed by the Cupertino-based tech giant, it represents another shift by Apple – away from Chinese factories.
Last month Apple had admitted it had begun manufacturing some of its flagship iPhone 14 handsets in India.
That said, it should be remembered that Apple still relies heavily on Chinese factories to make the bulk of its iPhone production.
But it is clear that Apple has exploring ways to increase sales in India, which the world’s second-largest smartphone market.
Some viewed the company’s shift to production in India was initially aimed at increasing sales locally in that market, Apple is now treating the country more like a strategic production base.
Indeed, market analysts estimate that Apple could turn India into a global iPhone manufacturing hub by 2025.
JP Morgan analysts predicted recently that Apple could move 5 percent of global iPhone 14 production to India by late 2022 and expand its manufacturing capacity in the country to produce 25 percent (one in four) of all iPhones by 2025.
India meanwhile will work to attract further investment by spending more than $30 billion on its electronics supply chain, Nikkei Asia reportedly said.
This signal that Apple is seeking to slowly reduce its reliance on China, where it has been producing the vast majority of its devices for over a decade, will worry Chinese authorities.
Apple it should be remembered has already moved some of its iPhone manufacturing out of China to other countries, most notable India, where it started manufacturing the iPhone 13 earlier this year, and is also considering assembling iPad tablets there.
In August it was reported that Apple had begun talks with two of its suppliers (Luxshare Precision Industry and Taiwan-based Foxconn, otherwise known as Hon Hai Precision Industry Co Ltd) about manufacturing the Apple Watch and Macbook in Vietnam.
To be fair to China, the tech manufacturing sector as a whole had been badly hit by the Covid-19 pandemic.
Indeed, Chinese manufacturing was badly impacted in 2022 by strict government lockdowns, as Chinese authorities sought to contain Covid-19 infections.
In April this year for example, Taiwan’s Pegatron Corp which assembles iPhones for Apple, said it had suspended operations at its Shanghai and Kunshan plants in China.
It took the decision to suspend production at the two factories due to the Chinese government’s strict Covid-19 protocols.
The pandemic also resulted in supply bottlenecks and delays (although this is now easing), and Russia’s war in Ukraine has further strained logistical supply chains.