Apple for the first time makes a top-of-the-line iPhone model in India

https://m.economictimes.com/tech/hardware/the-i-in-iphone-11-now-stands-for-india-made/articleshow/77135725.cms

by tech-historian • 6 years ago

186 153 6 years ago

m.economictimes.com

numpad0• 6 years ago

“Designed by Apple in California. Assembled in India.”

mmastrac• 6 years ago

"... Taxed in Ireland"

bergstromm4663• 6 years ago

With IP monpolized and enforced by the neo-colonial global North corporatocracy or empire, thanks to TRIPS [1]

"Meanwhile, the educational, information and intellectual commons have been plundered more than at any time in history. Thomas Jefferson, a founding father of the US Constitution, correctly said, ‘Ideas, in nature, cannot be made the subject of property.’ Sadly, that is precisely what has been done in the neo-liberal era.

A globalised intellectual property rights system was immensely strengthened by TRIPS (Trade-Related Aspects of Intellectual Property Rights) passed through the World Trade Organisation in 1994, shaped by a few US multinationals, backed by the US and UK governments. This has facilitated the commercialisation, privatisation and colonisation of ideas. Since 1994, the annual filing of patents has more than tripled, with the global stock of patents close to 12 million, each giving monopolistic control of some idea for 20 years or more.

Many patents result from publicly-funded research, diminishing the risk. But TRIPS allows corporations to receive monopolistic income for two decades, or use the patent to block others from producing something. Those claiming to believe in free markets should have opposed the trend, but reveal their class-based ideology by keeping quiet. There is evidence that the patent system hinders economic growth and innovation. It merely increases inequality and rentier capitalism."

[1] https://www.opendemocracy.net/en/oureconomy/plunder-commons-...

api3• 6 years ago

True, but find me a member of the Fortune 500 that does not do this kind of thing.

tonyedgecombe• 6 years ago

Or even "... barely taxed in Ireland"

stingrae• 6 years ago

Isn't this only for revenue generated in the European Union?

Shivetya• 6 years ago

Apple truly needs to get out of China, the amount of virtue signalling they do comes up sour considering their current manufacturing being heavily based in China. Look, I am all for corporations playing the good guy and standing up for what is right but you don't get a Get Out of Jail Free card with just a message, actions speak louder.

This could be more along the lines of alarmist chatter but should the US get a new President China's best opportunity to act on some of its threats to Hong Kong and Taiwan is after February 2021. Guarantee they took the lesson to heart about how Crimea and Ukraine were handled with effectively little more than hash tag diplomacy.

dan-robertson2• 6 years ago

I don’t think the dependence for manufacturing is sufficient to explain all the pressure Apple faces in China. Even if they were to move all manufacturing (not just final assembly) out of China they would still want to sell iPhones to the Chinese.

The cynic in me would suppose that the move is merely in case there is a backlash against anything “made in China” by western consumers/governments, but maybe Apple really are trying to reduce dependence on China or just cut costs.

In China I expect Apple to be just as craven as ever.

throw776432• 6 years ago

If that’s your reason, then Apple would need to move to Switzerland.

India has its own atrocities with Kashmir, Pakistan, recently Nepal, and their discriminatory Citizensip policy.

saagarjha2• 6 years ago

Some of their products already say "Vietnam" on them, particularly accessories.

politician• 6 years ago

They should use the Foxconn plant in Wisconsin.

detaro• 6 years ago

Don't think that'd help them avoid Indian import duty ;)

giarc2• 6 years ago

Wasn't that a flop that produced a fraction of the jobs promised for the billions in government hand outs?

notatoad• 6 years ago

It's only a flop if you assume that collecting billions in government handouts wasn't the whole point in the first place.

hristov• 6 years ago

That one is a little existentially challenged. As it only exists in Trump speeches.

three_seagrass• 6 years ago

Yeah, since Foxconn isn't using it:

https://www.theverge.com/2020/4/12/21217060/foxconn-wisconsi...

ksec3• 6 years ago

The whole point of Setting up a plant in India was to avoid / lower the high import tax.

nojito• 6 years ago

It's also cheaper to build (per phone) than in China.

bdcravens• 6 years ago

offtopic: this site breaks the back arrow (takes you to blank interstitial)

esalman• 6 years ago

True, that's pretty infuriating. I have mostly seen illegal sports streaming sites do that.

eitland• 6 years ago

Hint: for all but the most egregious offenders a long click (or right click) on the back button might bring up a list of the pages you visited before this. You can then click an earlier one to get back to safe ground.

Most people around here probably know already but there's always one or two that will have their life improved a lot I think.

btown• 6 years ago

Out of morbid curiosity, how does one become an "egregious offender" and nuke the entire back-button history? Are there ways other than (intentionally or unintentionally) doing history.pushState in a loop?

d3nj4l2• 6 years ago

I think the title should include "India", since I don't know if everybody is expected to know that Chennai is in India.

melling2• 6 years ago

“Hey Siri, where is Chennai”

The article also covers it immediately.

Robotbeat2• 6 years ago

90% of the people who read the headline won’t click... if you want to inform those >90% of people of a pertenant fact (Apple is starting to produce iPhone 11s in India), make the headline say it.

(Only reading the headline isn’t laziness... that’s like saying browsing library bookshelves without reading each book cover-to-cover as you go is laziness...)

ponker• 6 years ago

Would you say the same about much smaller cities like Paris or Berlin?

machello13• 6 years ago

Of course not. Obviously, how well-known a city is to a certain population doesn't depend on its size. There are a dozen cities in China more populous than NYC, but I doubt you could name them all.

speedgoose• 6 years ago

Just to be pedantic, if you think about Paris intra-muros, yes it's smaller but still the same order of magnitude. If you think about Paris with the suburb, it's actually about the same.

But the main thing : Paris is much more famous than Chennai.

oblio• 6 years ago

Wait until you find out the population of Geneva :-) Or Sparta, for that matter.

dividedbyzero• 6 years ago

No, those have much better marketing.

tech-historian• 6 years ago

I did include the word India when I submitted it, but somehow it is gone now...

johnvega• 6 years ago

May have been cut off if it was at the end. Perhaps change to "in India" from "near Chennai"

Jtsummers• 6 years ago

FYI, it's usually worth checking the headline that shows up after submission. Sometimes things get altered (sometimes capitalization is changed, words may be removed, etc.). Often the alterations are fine, but sometimes they change it in more ways than you expected. If you edit the submission within the first hour (?) the edited title should remain (unless a moderator comes by later and changes it again).

CydeWeys3• 6 years ago

Just curious, did you know?

d3nj4l2• 6 years ago

I'm Indian, so yeah!

jedberg2• 6 years ago

Apple isn't stupid. They know there is a good chance producing in China will no longer be profitable, or maybe not even possible with a future administration.

I predict a lot of production will move out of China because the USA will shift to a protectionist model in the next few years.

Apple is hedging against the same prediction.

atlgator2• 6 years ago

Biden will reverse course.

jedberg2• 6 years ago

I’m not so sure. Public sentiment is against China right now among Republicans and Democrats. Also at their current growth rate their GDP will surpass the USA around 2025.

It would be a uniting thing across party lines to rally around hurting the Chinese economy.

xtian• 6 years ago

You think so? https://www.youtube.com/watch?v=PmieUrXwKCc

thephyber• 6 years ago

Production will be stepped up in phases and Apple may consider exporting the India-made iPhone 11, reducing its dependence on China, two senior industry executives said.

This is being done to satisfy India's government so Apple can sell phones in India.

The diversification away from China seems like a nice seide-effect, but it's not assured until the Chennai-region FoxConn factory is running at full speed. Last I heard the Wisconsin FoxConn factory didn't ever make it that far. It's TBD if FoxConn can manage Indian employees.

wobbly_bush• 6 years ago

This is being done to satisfy India's government so Apple can sell phones in India.

What do you mean? Apple has been selling phones in India for several years now.

dartharva2• 6 years ago

This is being done to satisfy India's government so Apple can sell phones in India.

Nah, they were already doing that, and they seem to have acknowledged that they don't stand a chance against their competitors in a highly price-sensitive market as India. They've barely managed to capture a 2% share in smartphones after all these years and have only recently started to properly localize their offerings in the country. No one in India considers iPhones to be mainstream; they are almost always looked at as luxury smartphones.

I recall Apple India's CEO saying a few years ago that they more intended for India being an exporting hub for iPhones than a target market.

renewiltord• 6 years ago

Okay, that may be the case, but the principal contributor is surely tax and regulation incentives when you want to access the second biggest Asian market: in this case, the massive customs duty bypass by building in India.

chillacy4• 6 years ago

Specifically: Local production saves Apple 22% import duty.

That's a huge savings! If "Made in India" is anything like "Made in China" then it just involves bringing parts from other countries for final assembly, not even necessarily the highest value-add part of manufacturing.

chvid2• 6 years ago

Are they actually selling the iPhone 11 in India? Last I read phone sales in India had a massive drop.

chvid2• 6 years ago

https://techcrunch.com/2020/07/17/india-smartphone-shipments...

Smartphone shipments in India fell 48% in the second quarter compared with the same period a year ago, the most drastic drop one of the rare growing markets has seen in a decade, research firm Canalys reported Friday evening.

About 17.3 million smartphone units shipped in Q2 2020, down from 33 million in Q2 2019 and 33.5 million in Q1 2020.

...

Apple, which commands only 1% of the Indian smartphone market, was the least impacted among the top 10 vendors as iPhone shipments fell just 20% year-on-year to over 250,000 in Q2 2020.

dpacmittal• 6 years ago

India was in one of the strictest lockdown for a period of 2 months starting March 23rd.

f00zz2• 6 years ago

The new Motorola Razr is also being assembled in India. Is this a trend?

perryizgr8• 6 years ago

Samsung has been assembling flagships in India for a couple years now. Certainly not new. New for Apple definitely.

m0zg• 6 years ago

Shouldn't it be "Foxconn started making iPhone 11 near Chennai"? Apple is not "making" anything in this case.

saagarjha2• 6 years ago

Apple "makes" iPhones by contracting them out to Foxconn, so I wouldn't call the title inaccurate; it's just trying to appeal to more people.

jjcon3• 6 years ago

By that same reasoning you could also say ‘Foxconn is company and it doesn’t make anything, Indian people are making the iPhone 11 near Chennai’

It isn’t technically wrong but usually the inventor/creator is credited regardless of who they paid to assemble it.

codemac• 6 years ago

It's like the RICO act or something.

The Indian people are doing this voluntarily at the direction of Foxconn who is doing this voluntarily at the direction of Apple.

I'm sure we can go higher than just Apple as well.

andrewstuart3• 6 years ago

Serious question, why not in the USA?

Antrikshy• 6 years ago

Expensive.

andrewstuart3• 6 years ago

Because people?

Or more than that?

josephd79• 6 years ago

avg hourly wage is .55/hr USD. That is why.

andrewstuart3• 6 years ago

I wonder what it would add to the total cost of manufacturing a phone, to make it in the USA.

donarb2• 6 years ago

Because India wants its people making the phones (and earning wages) that will be sold in their country.

dilippkumar• 6 years ago

I have just begun exploring this question in depth, I'll share my half-baked understanding here. Please provide corrections, new insights and alternate explanations - it'll help me learn.

A question that's asked very early when thinking about a new product is the average selling price for the product (ASP). I believe that there are teams who specialize in generating various permutations of brand, product name, feature sets and price. This is fed to a study group and the choices made by the study group can be analyzed to make accurate predictions like "We can sell 12% more units if we drop the ASP from 899 to 849".

Because the ASP constrained to a very narrow range early in the product development process, all other costs are also constrained to a very narrow range even before real development begins. Important to my answer are BOM (bill of materials) and assembly costs.

The assembly costs are easy to understand: because of minimum wage requirements, healthcare costs and all that (can someone please link me to a full list of costs?), American labor is several times more expensive than competing labor in China or India. However, in the context of assembling a phone, improved training/skills/language abilities in America does not make American labor that much more productive. American labor's productivity can also not benefit from better tooling/automation - China can easily replicate similar tooling/automation improvements and cancel out American labor's advantages.

The BOM costs are a little more interesting. A single factory in China is probably manufacturing products for several American firms simultaneously. Imagine a factory manufacturing various types of phone chargers. They all likely source the same components (screws, capacitors, glue, packaging materials) from the same vendors - so a screw manufacturer (for example) who has a factory 2 miles away can send a shipment of screws to this assembly plant every day, and the screws will get used by all the American brand products being manufactured in that factory. Chinese factories have built up an incredible network of such suppliers around them. Often, if you are manufacturing a product, you can go ask the Chinese factory who will assemble your product for advice on which suppliers/vendors to use to save on BOM costs. They are happy to help.

If Apple were to make iPhones in America, the first and second challenges they will face will be the cost of labor and having to build up a deep supply chain that will feed into their American factories.

At such high costs, apple (or anyone) will conclude that they can not meet their profit margins at the desired ASP and scrap the entire product.

totalZero5• 6 years ago

One problem with using ASP and margin as the criteria for making decisions on manufacturing is that such a viewpoint gives an advantage to places with fewer worker protections.

A friend of mine made the point to me the other day, correctly I think, that it's very difficult to compete on price when your competitor is using slave labor. If I own a company that makes 5 products, and 1 of those 5 involves slave labor, I'm getting free work that I can amortize across all 5 products. So, even if a particular product does not involve slave labor, I can still sell it for cheaper if slave labor expands my margins somewhere else.

In a world where ASP and margins are the only criteria, forced labor camps like those found in Xinjiang make business sense. This suggests to me that maybe the "it's just business" mentality is neither ethical nor long-term sustainable, and can incentivize unlawful behavior.

chillacy4• 6 years ago

To the question in general: watch American Factory on Netflix for a good documentary on the efforts of spinning up a US based factory. Basically this company found that American workers were more expensive, had higher safety standards, and quality control was a struggle. In the end the company started to invest in industrial robots for automation.

To this specific case: it's probably to avoid the 22% import duty that India places on products not assembled locally. I suppose the US could pass a similar law.

skwb• 6 years ago

Really? The message I got from American Factory was that there are stark cultural divides between Chinese and American manufacturing. It's been a while since I saw it, but they made a point to emphasize some of the poor financial decisions the Chinese bosses made during refurbishing (I think an overly expensive stage was built).

dan-robertson2• 6 years ago

This isn’t really much of a shift in Apple policy. They seem to be doing this to avoid import duties and take advantage of some other government incentive. I think they also assemble iPhones in Brazil for similar reasons (?)

neosat• 6 years ago

This is really big deal IMO, but perhaps for a reason not directly mentioned in the article and for which you have to realize something about India. Progress in India is usually quite slow (and far slower if you compare to places like US or China). But once there is one shining example, then (partly because of the competition, partly because of the numbers of people) the momentum is strong and only gets larger.

This is potentially one of those events and has the potential to catalyze high end devices manufacturing in India leading to other second order effects of expertise in other hardware manufacturing. Looking forward to the innovation and confidence this unlocks.

missedthecue2• 6 years ago

The adage in India is that if you want to set up shop in china they roll out the red carpet. If you want to set up shop in India, they roll out the red tape.

tyre• 6 years ago

why do you think this is?

The Jio piece posted here a few days ago (stratechery, I think) made a point of Indian national pride, control, and home-grown expertise playing a large role.

Is that the case with new businesses generally?

4silvertooth• 6 years ago

Maybe because the history it has, once there was a company the East India Company, and it took them generations to get them out.

iamok• 6 years ago

I have only one question: how much pollution these factory will bring to India? Look at China, these kind of factories made a huge negative impact to the environment.

wyxuan• 6 years ago

Depends on the factory type and who is running it.

Considering that it’s run by Foxconn, who have significant experience in production and a reputation, i doubt there’s going to be much.

Also, as a phone assembly facility, it doesn’t make the same environmental damage that a coal fired power plant, or a steel manufacturing plant might have.

econcon4• 6 years ago

I have only one question: how much pollution these factory will bring to India?

Largest Indian imports is petroleum and also India has largest petroleum refinieries, removing them will he help pollution.

India should focus on renewables and nuclear power and ban petroleum products before going after Chinese electronics. But I think they'll not do it because it will hurt oil companies which are biggest benefactors of political parties.

econcon4• 6 years ago

But once there is one shining example, then (partly because of the competition, partly because of the numbers of people) the momentum is strong and only gets larger.

IT outsourcing giants are now obsolete - thanks to American recovery in software through cloud computing platform companies like AWS.

This is potentially one of those events and has the potential to catalyze high end devices manufacturing in India leading to other second order effects of expertise in other hardware manufacturing

I don't think it will change much. All high level process engineers will be Chinese in foxcons new plant. Workers will learn a few process but foxconn factories usually have very high level of automation. I don't expect much technology transfer in this.

f00zz2• 6 years ago

I don't expect much technology transfer in this.

Well, Foxconn itself started as a backyard operation making injected plastic parts, so who knows.

jerkstate• 6 years ago

Tim Cook insisted for years that you just couldn't manufacture stuff outside of China because of the high level of manufacturing skill. [1] Looks like that wasn't really true and it just took a little effort to start up in a different country, all it took was a small increase in the cost of doing business in China.

[1] https://www.inc.com/glenn-leibowitz/apple-ceo-tim-cook-this-...

luxuryballs3• 6 years ago

we'll see what the defect rate is soon enough

DeonPenny• 6 years ago

People said the same about china when manufacturing was sent there.

chillacy4• 6 years ago

They're still being made by Foxconn, so all that manufacturing expertise is still there. In the long run my guess is that this knowledge will start to trickle to more local manufacturers.

This seems like a great deal for India: threaten a 22% duty, and then you bring in jobs and know-how.

econcon4• 6 years ago

This seems like a great deal for India: threaten a 22% duty, and then you bring in jobs and know-how.

Lots of products have very high duties but you'll not find a single manufacturers of those products within the country.

Those companies simply add import duty to their cost and increase the price of good in local market. This makes products/tool expensive for local people and they are not able to compete globally.

If an America can buy a CNC mill from china duty free and you charge duty which makes $4000 mill cost $7000. Due to higher costs, your local craftman is already rendered uncompetitive in global marketplace

Why not let them buy tools and machines duty free and let them learn skills like CNC machining or metal turning?

iseanstevens• 6 years ago

It was true. This is bootstrapping you make it false.

sjwright• 6 years ago

The difference is that India has a very large population willing to train for the relevant skills. America does not.

totalZero5• 6 years ago

India's population is larger but I see no reason to believe Indians are more willing to learn skills than Americans. Would you mind explaining your argument, or at least backing it up with some kind of evidence?

The US labor market has long exhibited massive demand for skilled labor, and that's part of the reason that two-thirds of high-school graduates immediately enroll in college. USN&WR lists the US as being perceived fifth in the world for producing skilled workers, behind Japan, Germany, South Korea, and China.

https://www.usnews.com/news/best-countries/slideshows/top-10...

https://nces.ed.gov/fastfacts/display.asp?id=51

baddox• 6 years ago

Or, maybe he was correct the whole time and it just took this many years to change.

Apocryphon• 6 years ago

Could shifting manufacturing to India also lead to fewer leaks?

jonplackett• 6 years ago

The company hasn’t cut prices as it also sells iPhone 11 handsets made in China in India but industry executives said that could be an option later on. Local production saves Apple 22% import duty.

Maybe they'll just keep the change instead.

la6471• 6 years ago

That is like less than 1 pc of what is made in China. For all the make outside China hype I wonder how much serious effort will be needed to even make a dent in their current production.

Apple for the first time makes a top-of-the-line iPhone model in India

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