CNBC: US tech giant Apple will still rely on China for years despite shifting its focus away from China to India
Chinese article by 赵月
English Editor WM Zhang
04-26 18:04

By Gabby Chen

(JW Insights) Apr 26 -- Analysts predicted that Apple's dependency on China will remain for years to come, despite the tech giant's efforts to shift its focus away from China and expands its footprint in India, according to a recent article by CNBC.

Martin Yang, a senior analyst of emerging technologies at Oppenheimer & Co, said that there's potential for India to "become the next China" for Apple production, but it could take as long as a decade before it happens.

Nitin Soni, senior director at Fitch Ratings, told CNBC that the US tech giant still has a strong presence in China due to its supply chain partners, and China's infrastructure capabilities are still far better than what India can offer.

"It will take Apple years to diversify away from China," Soni said. "The country is still a very large pocket for Apple - not just in the assembly line, but the semiconductor ecosystem and testing as well."

Apple's efforts to move its assembly of products from China became more urgent in the last five years as US-China trade tensions intensified, and supply chain disruptions in the country. The iPhone maker had to scale back production in China due to those restrictions, a move that hurt its bottom line.

Navkendar Singh, an associate vice president with International Data Corporation (IDC) India, noted that it is also highly unlikely that Apple will be able to completely eradicate its reliance on China.

"Given the cost scales, logistics, and sheer inertia of some of the suppliers in the ecosystem in China, it's very unlikely that Apple can completely remove itself from China," Singh highlighted.

Apple has assembled iPhones worth over $7 billion in India during the last fiscal year, doubling the production of smartphones in the country after accelerating its shift away from China to other regions. Sources familiar with the matter indicate that Apple is now expanding its partnership with Foxconn and Pegatron to produce nearly 7% of its iPhones in India.

But analysts suggest that Apple's move into India also comes with risks, such as high import tariffs on components and finished products, which could affect retail prices and demand. India is also known for sudden changes in regulations, which could result in unforeseen costs for businesses, said the CNBC report.

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