Apple supply chain: MacBooks in Thailand, India ascendant

Bengaluru International Airport – probably quite a familiar sight to Apple execs at this point.

More news from Apple’s supply chain this morning as Apple encourages suppliers to begin MacBook production in Thailand, Foxconn commences construction on its next big factory in India even as the number of iPhones made in that country triples.

Almost one in ten iPhones now made in India

Apple continues to ramp up iPhone production in India.

A recent claim from Bloomberg states the company now makes nearly 7% (around $7 billion in value) of its smartphones in India and this seems set to increase rapidly across the next 12-24-months. This confirms earlier claims.

To put that into perspective Apple made just 1% of its iPhones there in 2021.

We think this means Apple will commence production of its next generations of iPhone simultaneously in both China and India, addressing any growing pains in the chains it faces when it does so. While the company isn’t saying, most observers think it wants to manufacture 25% of all its iPhones in India by 2025, increasing this in future.

At present its suppliers Foxconn, Pegatron and Wistron (now Tata) employ around 60,000 workers in India and make various iPhone models, including iPhone 11 and the current iPhone 14.

India’s smartphone business is booming, reaching $11b in value. “India is well on its way to become a leader in the mobile device market of the world and play a major role in India’s electronic exports. This is a major win for PM Modiji’s ‘make in India’ programme,” Union minister Ashwini Vaishnaw said.

Designed in Cupertino, made in Thailand & Vietnam

Taking it from the top: Local reports tell us Apple is in talks to make MacBooks in Thailand as it seeks to expand its supply chain outside of China.

To that end the company is speaking with suppliers who have existing manufacturing facilities there to discuss assembly, component, and module production for MacBooks. That’s from Nikkei citing three sources currently in talks with the company. Apple has been building Apple Watch in Thailand for over a year.

The back story is that Apple is already working with partners to make MacBooks in Vietnam, but some suppliers also have under-utilized factories in Thailand they hope to use for these projects. Other partners are already building new factories to make Macs.

There are some challenges to these plans and it seems Apple isn’t too enthusiastic to make Macs in Thailand, the report said. Why? Geographical proximity to China and the lack of free trade agreements relative to Vietnam are mentioned.

Foxconn lands again

Back to India and Foxconn will begin building its 300-acre plant in Karnataka next month. Foxconn’s largest factory in India is situated near Bengaluru International Airport and is expected to create 50,000 jobs across three years. There are some infrastructure challenges (roads) which will hopefully be rectified by state government in Karnataka, where Bengaluru is situated. The factory will churn out iPhones as Apple seeks to shift a large quantity of smartphone production to India. Apple has also leased new office space in the same city, presumably to support the overall aims of its supply chain transition.

The adventures continue

While there’s a perception that India will not purchase iPhones has been roundly rejected by Apple’s achievements in the nation.

Speaking during the last fiscal call, Apple CEO Tim Cook said:

“Looking at the business in India we set a new revenue record and grew double digits.

so, we feel very good about how we performed. And that was best despite the headwinds that we’ve talked about.

“Taking a step back, India is a hugely exciting market for us and is a major focus. We brought the online store there in 2020. We will soon bring Apple retail there. So, we’re putting a lot of emphasis on the market. There’s been a lot done from the financing options and trade-ins to make products more affordable and give people more options to buy.

“And so, there’s a lot going on there.

“We’re in essence taking what we learned in China years ago and how we scaled China and bringing that to bear.”

We can expect a little more official insight into Apple’s work in India when company Cook is expected to visit the nation to open the first Apple retail stores in Mumbai and New Delhi, and meet with Prime Minister Modiji.

Photo by Kartabya Aryal on Unsplash

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