Apple moves production of key AirPods component to India
It's no secret that Apple wants to expand the production of its devices in India. Originally, to avoid an import tax in a developing country where value pricing is very important, Apple produced older iPhone models in the country. Over the years, the company started to feel comfortable having newer iPhone units assembled in India. And this year, Apple had production of the iPhone 14 start in China and India simultaneously for the very first time.
Typically, Apple would start production of a new iPhone series in China and then wait to start producing some of the new line in India. As an example, in 2021 Apple waited seven months after the release of the iPhone 13 series to start production of some of those models in India. A few weeks later, similar production kicked off in Brazil. From April to December 2022, Apple shipped iPhone 14 units out of India valued at over $2.5 billion.
Apple wants out of China as the country remains a geopolitical hotspot
Apple wants out of China even though it is an important market for the company. Worried about China's position as a geopolitical hotspot and fearful that Apple might end up as collateral damage in a trade war between the two countries, the tech giant is slowly but surely moving production out of China although it isn't clear which country will end up hosting the bulk of future Apple production. Right now, 98% of iPhone units are manufactured in China.
Jabil's Indian plant where AirPods bodies are now being made
Last November, Foxconn announced that it will increase the number of workers at its plant in India that assembles the iPhone by a factor of 4 by 2024. Such a hiring push would increase the number of employees working at the factory from 17,000 to 70,000 by next year.
According to Bloomberg, one of the companies that supply Apple with components for the true wireless stereo AirPods earbuds, Jabil Inc., has started shipping plastic bodies for the device from its Indian facility. The parts are delivered to factories in China and Vietnam where the wearable is manufactured. Bloomberg says that its sources are people familiar with the situation who asked not to be named since Apple has not yet made public the move to produce some AirPods bodies in India.
Eventually, Apple plans to fully manufacture AirPods in India
Jabil has an 858,000-square-foot plant in Western India that employs 2,500 people. The move makes Apple's AirPods the second product from the firm to be fully or partially built in the country after the iPhone. Indian Prime Minister Narendra Modi's "Make in India" initiative has been given strong support from Apple. Eventually, the company hopes to fully build AirPods in India and the government has approved joint ventures between Apple's Chinese suppliers and Indian companies that will allow this to happen.
Neil Shah, Counterpoint's vice president of research, said, "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."
Apple is the leading company in the true wireless stereo category. Including earbuds and over-ear headphones, the company shipped 23.8 million units during the third quarter of 2022. This gave Apple a leading 31% share of the market.
Apple has long been rumored to be looking at several countries to replace China as its manufacturing base. Some of the countries previously mentioned include India, Mexico and Vietnam. The latter has become a major tech center and many analysts believe that Apple will end up moving production to that country. Wherever Apple moves its manufacturing base to, there needs to be enough qualified workers to choose from. Additionally, there needs to be a suppliers nearby that can deliver components in the quantity and quality that Apple requires.
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