This idea could save Apple millions

Apple is not letting go of the idea to lower its reliance on Chinese manufacturing due to rising geopolitical tensions, despite China remaining a market of utmost importance for the Cupertino giant.

We've reported earlier how Apple is meditating on the idea of moving substantial part of the iPad assembly process to neighboring India.

This might happen even earlier than projected after the Indian government's decision from recent days to cut back on import duty on selected Apple components. In other words, this is how Apple and its supply chain partners could save big money: somewhere between $35 and $50 million per year. That's because the import tax was 20% up until now, but was lowered to 15%.

Speaking of Apple's supply chain partners and assembly partners, Foxconn could use its facility in Sreiperumbudur to assemble iPads. Sreiperumbudur is located close to Chennai, the capital city of the Indian state of Tamil Nadu.

The shift to manufacturing in India is a significant win for the local administration, which has provided financial incentives to attract foreign companies like Apple. This initiative has reportedly created 150,000 direct jobs at Apple's supplier facilities in India.

In the fiscal year ending March 2024, Foxconn and Pegatron assembled nearly 67% and 17% of iPhones produced in India, respectively. The rest were manufactured at Wistron Corp.'s Karnataka facility, now owned by Tata Group, which plans to establish one of the largest iPhone assembly plants in the country.

In India, Apple currently manufactures iPhone models from the iPhone 12 to iPhone 15, excluding the Pro and Pro Max models. Most of these devices are exported, with Apple holding about a 6% market share in India, competing against more affordable Chinese smartphones. Not an easy task, when you get so much bang for your buck with potent Android mid-rangers!

Meanwhile, Apple CEO Tim Cook has balanced relations with Chinese officials while diversifying geographically. He visited China to meet with the commerce minister and open a new store in Shanghai.