(Bloomberg) – Apple Inc.’s Taiwanese contractor Pegatron Corp. has begun assembling the company’s latest iPhone 14 model in India.
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The move makes Pegatron the second Apple vendor to produce the iPhone 14 in the country, people familiar with the matter told Bloomberg News, declining to be identified because the manufacturing plan is not public.
It comes at a time when Apple’s main iPhone Pro manufacturing center in the Chinese city of Zhengzhou – operated by Foxconn Technology Group – has been placed under a harsh Covid-19 lockdown by authorities. This situation has highlighted Apple’s deep dependence on China, although the expansion into India is in line with diversification plans already in place, the sources said.
Representatives for Apple and Pegatron declined to comment.
Foxconn began manufacturing the iPhone 14 in India in September, just weeks after its global unveiling and much closer to parity with the start of production in China, where the vast majority of iPhones are still made. Apple’s main production partner still has exclusivity on iPhone Pro models, which it assembles in Zhengzhou.
The Pegatron factory in the southern Indian state of Tamil Nadu, which employed more than 7,000 people at the end of September, also started manufacturing iPhone 12 handsets earlier this year. Pegatron usually receives orders for entry-level models from Apple.
Apple, based in Cupertino, Calif., is seeking alternative production hubs amid a trade war between Washington and Beijing and strict enforcement of Xi Jinping’s Covid Zero policy in China. At the same time, New Delhi is positioning India as a competitor to Chinese manufacturing prowess. Local Apple retailer Redington has risen in value since Foxconn’s coronavirus concerns surfaced last week.
According to Ivan Lam, principal analyst at Counterpoint, one of the main obstacles to increasing production outside of China is that the majority of iPhone components are still manufactured there and must be shipped to where the devices are assembled.
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All of Apple’s largest Taiwanese suppliers – Foxconn, Pegatron and Wistron Corp. – accelerated iPhone assembly in India, boosted by Prime Minister Narendra Modi’s financial incentive scheme. This has also helped boost the South Asian country’s iPhone exports.
Apple began assembling iPhones in India in 2017 through Wistron after a years-long effort to build manufacturing capacity in the country. And while India is currently a small consumer market for Apple, the country of 1.4 billion people offers the US giant huge room for growth as incomes and internet connectivity increase.
–With help from Mark Gurman.
(Updates with Pegatron’s answer)
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