[Insights] The Battery Supply for iPhone 16 Might Come from India, with Safety Remaining the Top Priority

According to a news report from Financial Times, Apple has reportedly informed its supply chain, including battery suppliers such as China’s Desay Corporation and Taiwan’s Simplo Technology, of its inclination to shift the battery supply for the iPhone 16 to India. Apple is encouraging suppliers to relocate existing production capacity to India to expand production scale in the region.

TrendForce believes that, given the critical nature of battery components in terms of user safety, any error in battery assembly is unacceptable. As Apple’s certainty about production yields in India remains unclear, this move carries certain risks.

Apple Expedites iPhone Assembly Business Transfer to India to Mitigate Geopolitical Risks

As the world’s most valuable company, Apple’s supply chain strategy has always been a key factor in its success. Amidst geopolitical tensions between the U.S. and China, Apple faces significant pressure from both the investment community and U.S. policymakers to diversify its supply chain, prompting an acceleration in the transfer of iPhone assembly operations.

In recent years, Apple has been shifting part of its iPhone assembly business from China to India to mitigate production risks.

The choice of India as a manufacturing destination is influenced not only by its large and untapped population but also by proactive subsidy policies implemented by the Indian government, aiming to position India as an attractive manufacturing and export hub for multinational companies.

Additionally, the growth potential of the iPhone in the Indian market adds to the appeal of relocating iPhone production to India. 

Increased Risks as Battery Component Production Shifts to India amid Uncertain Yield Rates

Analyzing the manufacturing distribution for Apple’s iPhone 15 series in 2023 reveals Foxconn’s predominant role, with only specific Plus models being produced by India’s Tata Group.

This strategic move, based on TrendForce’s insight, is inferred to be influenced by the Plus models’ lower sales performance in previous generations and their specific product positioning. Apple seems cautious about shifting production to India entirely until the production standards of Indian manufacturing facilities are confirmed, especially for models with comparatively lower demand.

In the ever-evolving landscape of smartphone components, such as core processors and camera modules, upgrades occur almost annually. However, the upgrade pace for smartphone batteries has been notably slower.

This delay is attributed to the critical importance of safety in battery components. Given the potential risks to user safety, even a minor error in battery components could lead to significant harm to a smartphone brand.

Considering this, the manufacturing distribution for Apple’s iPhone 15 series suggests that Apple might not be entirely confident in the production yield rates in India.

If the decision to shift the production of batteries, which requires a special emphasis on safety, to India is solely driven by the need to mitigate geopolitical uncertainties, it indeed poses a certain level of risk for Apple.

Read more


[News] Tata Group Plans to Build New iPhone Assembly Plant in India, Aligning with Apple’s Localization Strategy for the Supply Chain

Apple’s iPhone is gaining even more popularity in India, with Tata Group, India’s conglomerate, reportedly preparing to build a new iPhone assembly plant. According to Bloomberg, this move aligns with Apple’s broader manufacturing strategy expansion in India.

Previously reported by TrendForce, Apple’s decision to opt for India is primarily due to the fact that since 2015, India has become the fastest-growing regional market for smartphones globally. Earlier in October this year, Tata Group officially acquired Wistron’s subsidiary in Bengaluru, primarily responsible for assembling orders for the iPhone 14. 

According to sources from Bloomberg, Tata Group is not only recruiting new staff for this facility but also planning to build the largest iPhone assembly plant in the town of Hosur, Tamil Nadu, India.

The new facility is expected to establish 20 assembly lines, planning to employ approximately 50,000 workers within the next 2 years. It is slated to be operational within 12 to 18 months. However, the existing government-supported PLI (Production-Linked Incentive) fiscal incentives will expire around the time of operation. Therefore, Apple and Tata Group may seek new subsidies from the government for the production of the new iPhones.

Apple has been actively expanding in India, and the new iPhone assembly plant is a crucial strategy for both companies. For Apple, it serves to diversify the supply chain risk by gradually shifting the assembly of iPhones from China to India. Meanwhile, Tata Group aims to expand its traditional business scope.

Read more

(Photo credit: Apple)

Please note that this article cites information from Bloomberg and TechNews.


[News] Foxconn Invests Over USD 1.5 Billion in Expansive Production in India, Creating a New Hub for iPhone Manufacturing

Foxconn has announced plans to invest over USD 1.5 billion in expanding its facilities in India. This substantial investment, a rarity in recent years, has sparked speculation that Foxconn is preparing for the introduction of new iPhone products in India.

Due to reports suggesting that in the second half of 2024, Apple will initiate the design, development, and trial production process for the iPhone 17 in India, if true, this would mark the first time in iPhone history that a New Product Introduction (NPI) is conducted outside of China, solidifying India as a potential global iPhone production hub.

Foxconn’s subsidiary, Foxconn Hon Hai Technology India Mega Development Private Limited, disclosed the plan to build the factory locally, with an expected investment of INR 128.209 billion (approximately USD 1.537 billion). This move is seen as a strategic effort to enhance iPhone production capacity in India.

According to TrendForce’s estimate, the proportion of iPhones produced in India is still below 10% in 2023, expected to reach 25-30% by 2025, and projected to achieve 35-40% by 2028. TrendForce believes that with the stable production base of Foxconn in India, it can indeed expand the output.

Analyst Ming-Chi Kuo from TF International Securities disclosed that Apple is placing a growing emphasis on the Indian market. The company intends to kick off the NPI process for the standard edition of the iPhone 17, slated for release in the second half of 2025, in India during the latter part of 2024.

Kuo further highlighted that this development signifies the first instance of a new iPhone model being developed outside of China. Choosing the standard version of the iPhone for development lowers the design complexity, reducing risks. This year, 75-80% of iPhones produced in India are manufactured by Foxconn.

According to a previous report by Indian media Economic Times, Foxconn’s factory in Tamil Nadu, India, has been producing the iPhone 15 Plus in the fourth quarter of this year and has already started production of the standard version of the iPhone 15.

Before the iPhone 14, only a small portion of Apple’s phones were assembled in India, with shipments lagging six to nine months behind those in mainland China. However, this year, India has officially entered the supply chain for the initial batch of new iPhones.

Foxconn’s India representative, V Lee, previously stated that the company was “aiming for another doubling of employment, FDI (foreign direct investment), and business size in India” by next year. However, no further details were provided.

In other product areas, there have been recent reports that three subsidiaries of the Foxconn Group will be among the first approved list of incentives for information technology (IT) production in India. Foxconn Group is also accelerating its layout for manufacturing and components in India.

(Photo credit: Apple)


[Insights] Tata’s Challenge in Securing Large iPhobe Orders After Officially Acquiring Wistron’s India Factory

According to Bloomberg’s report, Taiwanese company Wistron, previously one of Apple’s iPhone assembly suppliers in India, has agreed to sell its 100% stake in Wistron InfoComm Manufacturing (India) Private Ltd. to Tata Group for $125 million on October 27, 2023. Wistron will formally exit Apple’s supply chain, and Tata will become the first local iPhone assembly supplier in India.

TrendForce’s insights:

  1. Apple Focuses on Indian Manufacturing as Wistron Exits iPhone Assembly Business

Amid international geopolitical risks, Apple has chosen to diversify its supply chain and production risks by shifting its iPhone assembly business from China to India. Apple’s decision to opt for India is primarily due to the fact that since 2015, India has become the fastest-growing regional market for smartphones globally.

Additionally, in recent years, the Indian government has actively worked to make India an attractive manufacturing and export hub for international companies. With strong government policy support and a vast domestic market, these factors have allured Apple to shift its production base here.

In the past, Wistron, along with Foxconn and Pegatron, was one of the three iPhone manufacturers for Apple in India. However, in 2020, there were reports of a riot at Wistron’s Indian factory, where thousands of Indian employees were dissatisfied with excessive working hours and unpaid wages. They vandalized the factory and even stole iPhones. This incident prompted Apple to initiate an investigation and ultimately led to a temporary suspension of its orders with Wistron.

Additionally, on July 17, 2020, Wistron announced the sale of its iPhone assembly plant located in Kunshan, China, to Luxshare Group. While this factory had an annual revenue that could exceed 100 billion yuan, its net profit margin was only 0.2%.

It can be inferred that the profit margins in the subcontracting business were inherently low, and following the riot incident at its Indian plant, Wistron may have lacked the bargaining leverage with Apple. Therefore, after considering all factors, it decided to sell its iPhone assembly plant in India.

  1. Tata Group Takes Over India Manufacturing, But Expectations Are Low for a Significant Increase in Their Share of New iPhone Assembly

Currently, Wistron’s factory in Bengaluru is primarily responsible for assembling orders for the iPhone 14. To qualify for production subsidies from the Indian government, Wistron has committed to producing at least $1.8 billion (USD) worth of iPhones by March 2024.  After this transaction is completed, Tata Group will take over and fulfill this commitment.

Previously, Tata Group’s casing factory produced only one out of every two components that met Apple’s standards, indicating significant room for improvement in its yield rate. By examining the outsourcing production share table below, it is evident that Foxconn has the highest share in Apple’s current new iPhone assembly. Among these four models, only certain models like iPhone15 and iPhone15 plus are produced by Tata Group in India.

This suggests that Apple may be allocating the production of relatively less popular models to Tata Group for testing their yield rates. This decision may be due to the positioning of iPhone and Plus series products, coupled with their comparatively lower sales performance in recent generations. Apple is likely doing this until the production standards of the Indian outsourcing factory can be confirmed to meet 100% compliance.

Consequently, even though Tata Group’s acquisition of Wistron’s subcontracting factory is expected to expand its capacity, its share in new iPhone assembly is unlikely to significantly increase in the short term.

Read more


[Insights] Optimism Arises in Smartphone Market as High-End Lens Demand Surges

Major optical manufacturer, Largan Precision, held its online Q3 earnings conference on October 12, 2023. During the session, Chairman Lin En-ping’s responses to inquiries from analysts conveyed that the previously sluggish smartphone market might finally witness an upturn in Q4, as the iPhone 15 Pro Max’s robust pre-order performance surpassed market expectations. This bodes well for downstream customers’ willingness to procure lenses, and high-end lens demand is expected to rise.

TrendForce’s Insight:

  1. Positive Signals Emerge from Largan Precision’s Statement

Since the beginning of 2023, the global smartphone market has been experiencing a general slump, influenced by factors such as China’s post-pandemic economic recovery falling short of expectations, rampant inflation, and uncertainty about economic prospects. Looking back at the previous Q1 and Q2 earnings conferences held by Largan Precision, Chairman Lin En-ping consistently displayed a relatively pessimistic outlook when addressing questions from financial analysts. This pessimism can be attributed to the subdued end-user demand, resulting in a natural decline in procurement momentum among downstream customers, which has made it challenging for Largan Precision to foresee clear future order demand.

However, with the arrival of Q4, the traditional peak season for smartphones, Chairman Lin En-ping provided a more positive response during the latest conference. This shift in stance can be attributed to the better-than-expected pre-order status of the high-end iPhone 15 Pro Max and the subsequent improvement in procurement momentum among downstream customers. Furthermore, there has been a resurgence in overall demand for high-end lenses. It is anticipated that the end demand for smartphones may improve in the upcoming Q4.

2. Increased Willingness for Lens Upgrades

In the case of the iPhone 15 Pro Max, Apple made significant hardware upgrades to the camera module, addressing the feature consumers care about the most. By incorporating an exclusive tetraprism periscope telephoto lens module into the limited space within the device, they achieved a 5x optical zoom capability. This camera upgrade became a highlight of the product launch and contributed to the iPhone 15 Pro Max exhibiting stronger pre-sale momentum compared to other models. Consequently, the entire supply chain benefited from this success.

Notably, Chairman Lin En-ping’s shift from his prior pessimistic stance during the earnings conference suggests an optimistic outlook for the fourth quarter of 2023, with an anticipated upturn in end-user demand for smartphones.

Additionally, given the evident strong pre-sale performance of the iPhone 15 Pro Max in the overall market, it is expected that brand manufacturers will be more inclined to enhance their camera modules. This enhancement could involve incorporating more lens groups in periscope-style lens modules, offering a greater range of physical variable apertures, or adopting glass-plastic hybrid lenses, especially in higher-tier smartphone hardware configurations. Anticipating this development trend, we can expect to see a resurgence in the trend of upgrading smartphone camera capabilities.

Read more

  • Page 2
  • 7 page(s)
  • 35 result(s)