This step would minimise the impact of the US-China trade war
To diversify its production, Apple might start to manufacture iPads in India for the first time.
The Indian government plans to launch a scheme to boost India’s computer exports, and Apple is trying to get a better deal out of it.
According to Reuters, India’s new performance-linked incentive (PLI) scheme will have a budget of up to Rs. 70 billion (£687 million) over five years and will offer cash-back to manufacturers for exports.
However, Apple is reportedly asking for the incentive to be almost tripled to Rs. 200 billion (£2 billion).
That is because, according to Apple, India’s supply chain does not yet have the scale to meet its demand.
This new incentive scheme is expected to be launched by the end of February 2021.
The California-based company already manufactures iPhones in India since 2017, but it aims to diversify its manufacturing out of China.
This step would minimise the impact of the US-China trade war and the coronavirus crisis.
In India, Apple will likely have iPad’s assembled by one of its existing suppliers in the country, which are Foxconn, Wistron and Pegatron.
The three suppliers have also committed around $900 million (£642 million) over five years to make iPhones in India.
However, it is not yet clear which of Apple’s three contractors will assemble iPads.
India has already launched a $6.7 billion (£4.7 billion) plan to boost smartphone exports last year, in an attempt by Prime Minister Narendra Modi to promote electronics manufacturing and create jobs.
Not only, but the country is also planning another performance-linked incentive at a budget of approximately Rs. 50 billion (£491 million) over five years to improve domestic manufacturing of wearable devices such as smartwatches.
Apple is seeking to expand its production in Vietnam as well.
The company is mobilising Vietnamese suppliers to expand their production capacity for the latest HomePod mini.
The HomePod mini has been produced in Vietnam since its launch in 2020.
According to some sources, Apple had even increased the local production in Vietnam of its audio-related products, including its various AirPods line-ups.
Apple’s AirPods series first went into trial production in Vietnam in 2019, with mass production following in 2020.
One Apple supply chain manager said:
“Apple and many other tech companies all want out-of-China production capacities, and that has not slowed even though the US has a new president.
“And they are studying not only peripheral products.
“Apple, for example, aims to build capacity in new locations — mostly south-east Asia nations — for multiple core products, such as iPhones, iPads, MacBooks, AirPods and others.
“It was hard to imagine that two years ago, but now, nothing is impossible to shift.”