Moscow, July 8 — “Lead. Economy” According to The Economic Times report, iPhone shipments to India dropped to 220 000 units in January-March. In April, the situation slightly improved due to large discounts, but the sales fell again in may-June. This is not surprising, given the large number of budget smartphones from other companies such as Samsung, Xiaomi and OnePlus.
Neil Shah, research Director Counterpoint Technology Market Research in Hong Kong, said annual estimate iPhone shipments to India is 1.5 to 1.6 million is 10-17% less than in 2018, and 53% lower than last year. In 2017, the company shipped in the market of 3.2 million units.
Apple already has plans to manufacture its phones in India through Taiwanese manufacturer Foxconn. Local production of smartphones should lead to lower prices and ultimately on the number of sold gadgets. About 75% of the iPhone can be exported at a time as Apple tries to shift the supply chain outside of China.
Apple was forced to take such measures in connection with the aggravation of trade relations between the US and China. Whatever the decision did not come country, Apple will not change its plan for migration of production capacity outside of China. The company believes that the risks from heavy reliance on Chinese factories are too large and they continue to grow, says the publication.
Apple has not set its suppliers the time within which they should send their business proposals. The transfer of production will take a lot of time, so China in any case will remain a major place of dislocation of the Apple contract. Sources say that after the choice of location for new plants will take at least 18 months to start production. At the moment, more than 90% of Apple products is going in China.
It is believed that about 5 million jobs in China depend on the production of Apple in the country, and the company has about 10 thousand direct employees.
Wedbush analysts expect Apple shares will rise in price to $235, if the tension in relations between the US and China will reduce. On the other hand, if the second wave of tariffs will force Apple to place orders for manufacturing imported into the US mobile devices outside of the PRC, the company’s revenues in the next few years will decline by 10-15% from the conventional “civilian level”.
The number of partners that Apple is pushing for the relocation of production outside of China, entered Foxconn, Pegatron and Wistron, Quanta Computer (makes the MacBook), Compal Electronics (makes iPad) and Inventec Corp, Luxshare-ICT and Goertek (headphone makers AirPods). These companies are considering several countries for the construction and expansion of plants such as Mexico, India, Vietnam, Indonesia and Malaysia.
According to the Nikkei, the key manufacturers of the iPhone could be Vietnam or India. Apple has already begun production of its smartphones to more low price segment in India. Last year it was reported that the Cupertino think of the launch of its more premium devices in the country.
By the end of this year, Apple plans to start in India production of 250 000 smartphones per month, exporting 70% to 80% of its products to other countries. The more smartphones will be produced outside China, the less likely it is that the most important product Apple will suffer from import taxes and tariffs in the United States.
India also plans to ease its requirements to the companies producing at least 30% of goods locally, these requirements were serious obstacles for technology companies. In the result of foreign direct investment in India in 2018 decreased by 13%. However, the weakening of the local rules will allow a greater number of technology companies that are leaving China to find a place in India.
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