David Imel / Android Authority
It goes without saying that the iPhone is the most recognized smartphone in the world. Apple ships nearly a quarter of a billion units each year and the company has a market share of nearly 20%. With so many phones surging year after year, you might be wondering: where is the iPhone made and how does the latest model reach customers so quickly with each generation? Let’s break it down.
Before assembly: Where do the components of the iPhone come from?
Although it is tempting to take the Made in China text on an iPhone at face value, not everything that goes into making an Apple product comes from one place.
The iPhone screen, for example, is made by Samsung or LG in South Korea. The flash memory and DRAM, on the other hand, probably come from Kioxia’s factories in Japan. And the Gorilla Glass that protects the screen could come from a Corning factory in the United States, Taiwan or Japan. Apple’s A-series SoC, on the other hand, is a custom silicon designed in California but manufactured by Taiwanese company TSMC. And we’ve barely scratched the surface with this list so far.
The iPhone relies on electronic components from various countries, including the United States.
Apple also relies on third parties for smaller, sometimes custom-made components, such as power management ICs, USB microcontrollers, wireless chipsets and OLED drivers. These can come from large companies such as Broadcom and Texas Instruments as well as smaller Southeast Asian manufacturers. Elsewhere in the world, Apple has even tried to get raw cobalt directly from miners to ensure shortages don’t affect its ability to make iPhone batteries.
The choice of supplier is very important and it is not only for quality control reasons either. Apple, along with other Silicon Valley giants, has been accused of relying on child labor and unethical mining practices to cut costs. Needless to say, such allegations could lead to costly lawsuits and negative publicity for the company.
Final production: where are iPhones made and assembled?
Ryan Haines/Android Authority
With singular components out of the way, who made the iPhone before it came to you? Factories in China once assembled every iPhone, but that’s starting to change now.
However, most of the factories dedicated to assembling the iPhone remain in China. The largest, operated by manufacturing partner Foxconn, is located in Zhengzhou and employs more than 300,000 people. In many ways, the complex looks more like a mini-city than a typical industrial site. This is not surprising considering that Foxconn is said to have assembled over half a million iPhones here in a single day. But that may not last forever as Apple seeks to move some production to neighboring countries like India and Vietnam.
Apple has recently diversified its iPhone production outside of China, with India and Vietnam emerging as top picks.
Apple isn’t the only consumer electronics company to branch out outside of China lately. Samsung and Xiaomi have also found great success in other Asian countries. The China Plus One strategy has become a popular business strategy as businesses seek to reduce operating costs and reduce reliance on a single region.
Both Asian countries offer advantages to foreign investors looking to set up manufacturing facilities. They also provide geopolitical and economic stability – factors that have severely affected Apple’s iPhone production in China. These bottlenecks even forced the company to issue a press release warning of longer wait times for deliveries.
Why does Apple assemble products in Vietnam?
Vietnam is strategically located for global shipping – the country is in geographic proximity to existing Apple supply chain anchors such as China, Taiwan, Japan and others. It also has free trade agreements with other East Asian countries and is a member of the Association of Southeast Asian Nations (ASEAN). Finally, Vietnam’s entire economy is based on exports. From agricultural products to clothing to electronics, the country has benefited greatly from the diversification of Western companies outside of China.
Apple moves a large part of iPad, Macbook and Airpods production to Vietnam.
Apple isn’t completely new to Vietnam either – the company has already assembled smaller products like wired EarPods in the country. And according to a source cited by Nikkei, Apple started assembling the AirPods in Vietnam in March 2020. This was quickly followed by the high-end AirPods Pro. Now, Apple is also transferring a significant percentage of iPad, MacBook and Apple Watch production to Vietnam.
The Cupertino giant plans to achieve these goals through its manufacturing partners Foxconn, Pegatron and Wistron. According to local reports, Apple had started assembly at 11 factories run by various manufacturing companies in Vietnam in early 2022. At that time, Foxconn also obtained a license from the Vietnamese government to build a $270 million assembly plant. dollars in the province of Bac. Giang, less than 80 km from the capital Hanoi. The facility would have enough capacity to ship eight million laptops and tablets per year.
Why is the iPhone now made in India?
India, Apple’s second-favorite manufacturing destination, offers strong incentives for local manufacturing compared to many of its neighbors. The government Made in India initiative was a resounding success. In 2020, it launched a $6 billion production-linked incentive program that rewards brands for establishing domestic manufacturing of smartphones and electronic components.
Android brands such as Xiaomi, Oppo and Samsung have already joined the Make in India initiative through a combination of in-house and third-party manufacturing facilities. Some examples of the latter include Bharat FIH and Dixon Technologies, which assemble Xiaomi and Samsung smartphones.
Given these successes, it’s no surprise that Apple is aiming to follow suit. It also helps that its biggest partner, Foxconn, already has a strong presence in India. The aforementioned Bharat FIH is a subsidiary of Foxconn Technology Group.
The Indian government is offering smartphone makers various financial incentives to set up domestic factories.
Apple’s decision to move its assembly lines to India could also boost iPhone market share in the region. Currently, India levies a 22% customs duty on imported smartphones. This makes the iPhone significantly more expensive in the country than in most Western markets.
With local production, however, Apple can avoid those high import fees and could pass the savings on to consumers. In fact, the company has already followed this strategy with previous generation iPhone models, which it is already assembling in the country. Even though the latest iPhone sells for a premium in India, older models often get steep discounts, likely due to the aforementioned tax breaks.
By assembling the iPhone in India, Apple can avoid high import fees and gain market share in the domestic market.
With iPhone 14, Apple started assembling current generation iPhone models in India for the first time. The company tapped Foxconn for the work, specifically at the latter’s Sriperumbudur plant in the state of Tamil Nadu. However, Apple only chose to move a small percentage of its iPhone 14 production from China to India – around 5% right after launch.
Who will make Apple products like the iPhone in the future?
Robert Triggs/Android Authority
Even with Apple’s migration to South and East Asia, the bulk of the company’s production facilities will remain in China. Several key electronic components still come from the region. Moreover, China still has a lot of manufacturing infrastructure already in place. However, the country’s dominance will likely diminish over time. Nonetheless, Apple’s existing factory partners will benefit either way, as they will continue to build and operate facilities even outside of China.
We’ve already covered why Apple might want to move assembly to Vietnam and India in the coming years. Financial forecasts expect the transition to happen sooner rather than later. A JPMorgan analyst said the following in a note to the company’s clients:
Vietnam is becoming the production hub for components (camera modules) and EMS of smaller volume products (Apple Watch, Mac, iPad) and is already a major destination for manufacturing AirPods. For iPhone EMS, India seems to be the place to diversify the supply chain outside of China.
The analyst further estimated that Apple will relocate around 25% of its iPhone production to India and 65% of AirPods assembly to Vietnam by 2025. Other products that could also see some assemblies leave China include iPad, MacBook and Apple Watch.
To conclude, there is no single answer as to where the iPhone is made. While final assembly only takes place in two or three countries, individual components and raw materials for the iPhone are sourced from almost every corner of the world.