Emerging Markets: Apple’s Play in India
In almost any public place in the U.S., you’re probably within an arm’s length of an iPhone. In fact, earlier this year, the Wall Street Journal reported that “Apple’s share of worldwide shipments of smartphones priced at $800 and above grew to 76% last year…” It comes as no surprise given that Apple is the largest company by market cap ($2.597 trillion as of 4/13/23). With this much control of market share, China’s zero COVID policy called into question Apple’s reliance on one of Foxxconn’s (Taiwanese electronics manufacturer; iPhone manufacturer) largest manufacturers in Longhua District, Shenzhen where over 200,000 people work. Think back to the height of the pandemic when headlines were dominated with articles about supply chain shortages. The iPhone wasn’t spared from this. Since then, we’ve seen Apple branch into other markets, likely to ease some of their heavy reliance on China and its manufacturers.
Currently, India is the country to watch. According to a separate article in the Wall Street Journal, Foxxconn has an existing plant in Chennai, and in addition to ramping production there, they are also discussing building an entirely new plant in Hyderabad. While these plans aren’t set in stone, it’s important to take note that large companies like Apple are looking to diversify away from China. Certainly, China will remain an important piece of manufacturing and supply chain as they’ve done for decades, but the investments made to lessen dependence on China and spread risk can’t be ignored.