Apple eyeing India over China for iPhones, more? Analyst Kuo plays spoilsport

A few days back, it was reported that Apple is set to expand its production outside China, which manufactures more than 90 percent of Apple products such as iPhones, iPads, and MacBook laptops. A report by Wall Street Journal revealed that to reduce the Dependency of Apple on China, which is the hub of Apple products, the iPhone maker will move towards Vietnam and India for its productions. But the famous Apple analyst Ming Chi Kuo in his comments on this development, indicated that the move to shift Apple's manufacturing operations to India carries "potential geopolitical risks."

In a long Twitter thread, Apple analyst Kuo explained that setting up production in India could involve possible geopolitical risks for Apple's contract manufacturers in China such as Luxshare ICT and Goertek. According to Kuo, this can be reduced by establishing facilities in Vietnam. The TF International Securities analyst also predicted that setting up production facilities in Vietnam over India could reduce the geopolitical risks and it will be a better option for Apple.

The WSJ report mentions that the primary reason behind the expansion of product manufacturing outside China is simply the Covid-19 lockdowns imposed in Beijing and the other part of the country and this has impacted Apple production. Well, the clashes between China's authoritarian Communist government and the US can be some other potential reasons behind Apple to look for an alternative to China for production.

However, Kuo noted while citing the WSJ report, "AirPods Pro 2 will enter mass production in Vietnam in 2H22, a successful case of mass production of Apple's major products outside China." Though, he said that the shift of AirPods Pro 2 production to Vietnam can be attributed to the relatively not complicated supply chain but Vietnam's better production environment, such as infrastructure and workforce in comparison to most countries outside China. Well, he brought attention to the challenges faced by the successful experience of AirPods Pro 2 to other products or countries in the short term. "The NPI of AirPods Pro 2 is still in China, implying it's not easy to establish a complete non-China production site," he added.

India has been the production site for Apple since 2017 for manufacturing some iPhone models, even last month, iPhone 13 was confirmed to be manufactured in India. Though, experts believe that Apple would need a stronger domestic market for the production of the iPhone, iPad, MacBooks, and other Apple products.