It's true at this current time, China is the best ecosystem to manufacture electronics. Moving anywhere will incur a higher cost but this higher cost is temporary.<p>This is econ 101. Moving now is pricier in the short run, but the investment, particularly in India, means that there will be a new ecosystem being built that will eventually provide the same costs and availability as manufactured in China without having to deal with the forced tech transfers, censorship, nationalistic boycotts, and a country that is increasingly hostile to democratic values and international norms.
$213.5 million - Indian Unit - for “long-term investment”<p>$16.5 million - Vietnamese Unit - "for operations and sales"<p>Easy to see where the major investment is.<p>I see this is as a clear intent to start putting roots in the Indian market, especially since regulations for international phone imports in India are sometimes prohibitive. Though this move isn't to manufacture iPhones <i>right now</i>, they might be making a strategic move to be appealing to Apple, to produce more phones (a future cheap - XR like version maybe?) in India.<p>That would be in addition to the production already in place in India for some iPhones.<p>Apple still has the brand awareness in India. The iconic Apple logo's power has yet to die. I'm not sure if they expect to sell high end iPhones about $1000+ in volume, because they will fail.<p>One because that isn't cheap even for American blood. And the concept of monthly payments for <i>a phone</i> (price exceeding most two wheelers' prices -- a popular mode of transport) won't sit well with people there, especially devoid of all the carrier incentives in the states.<p>This is also following rumors from a bit ago -
<a href="https://www.reuters.com/article/us-apple-india-exclusive/exclusive-foxconn-to-begin-assembling-top-end-apple-iphones-in-india-in-2019-source-idUSKCN1OQ0M6" rel="nofollow">https://www.reuters.com/article/us-apple-india-exclusive/exc...</a>
The investment in Indian unit has been long time coming. India has a strict policy on imported phones. Xiaomi, which is nearly the market leader in India has been doing it for a long time:<p><a href="https://www.indiatoday.in/technology/news/story/xiaomi-now-has-6-smartphone-manufacturing-plants-in-india-will-also-make-pcbas-locally-1207974-2018-04-09" rel="nofollow">https://www.indiatoday.in/technology/news/story/xiaomi-now-h...</a><p>Apple had lobbied hard against these rules but given that "Made in India" platform had be one of the bedrock policies of Prime Minister Modi, this was going to be an uphill battle.<p>That said, I might be pessimistic but I don't see this changing Apple's fortunes in India.
A perfect example of a non-news turned into news just to sell ads. Trade tensions have nothing to do with foxconn or anyone's expansion in vietnam/ASEAN or india. Multinational corporations have been moving to vietnam and india for at least a decade now. Even chinese companies are moving to vietnam and india as they look to exploit wage differences between china and vietnam/asean/india.<p>From 2008 ( can't believe 2008 was 11 years ago ) ...<p><a href="https://money.cnn.com/2008/08/13/smallbusiness/the_new_china.fsb/index.htm" rel="nofollow">https://money.cnn.com/2008/08/13/smallbusiness/the_new_china...</a>
$216mn in India and $16mn Vietnam seems really small investments in the grand scheme of things. I doubt this indicates any material change in strategy other than introducing some manufacturing in India
It should be noted that Foxconn is a Chinese company in the larger sense of the term (i.e. not PRC but ROC) and its founder's family is from Shanxi and moved to follow the Nationalists (and so unsurprisingly he supports the KMT).<p>This is a business decision to expand and diversify but that also widens the Chinese sphere of influence.<p>Its existing factory(ies) in India are very much used by China mainland smartphone companies, which dominate the Indian market, for example...
It is very hard to move that manufacturing process and supply chain out of China without making it more pricey. China got everything they need.<p>It will take decades to those other countries fulfil what China is offering _Today_
Anecdotal, but I have a friend who manages a Thai manufacturering business/factory (hard drives, optical mice, etc). He said a couple of US companies moved their production out of China to them because of this trade war spat, which presumably he’s happy about.<p>Now he’s asked me if I know any other US manufacturers who he could manufacture for (guessing because I work in tech (though software) & live in the states)<p>Would love to help him, but don’t really know how. Makes me realize I haven’t networked enough.
You have to think that competition between countries is good for Apple here.<p>If all the tech is in China, there is no competition to have the most favorable regulatory/taxation scheme. If there are two competitions, both have an incentive to lure more manufacturing towards themselves.
Good for Apple's future in India - getting those manufacturing jobs
over there is the first step to boosting incomes, eventually
to the point of being able to sell more iPhones there.
At least the Vietnam deal has been in process since early December [1] when the Vietnamese government leaked it to the press.<p>What I am somewhat confused about, that maybe someone with more experience in the import/export situation can enlighten me on, is whether the Wisconsin plant was also some sort of move in this direction or not. What are the advantages of trying to avoid a trade war by opening up facilities in some neutral third country, as opposed to what they already have, which is facilities in both "belligerent" countries? Is it that you're trying to route Chinese-made products through some minor step in India or Vietnam in order to say "no these really came from India/Vietnam, the tariff doesn't apply" and maintain capacity? Or is the idea that they're ramping up enough capacity in India/Vietnam/US that they no longer have to depend on Chinese policy in general? Or something else?<p>[1] <a href="https://www.reuters.com/article/us-foxconn-iphone-vietnam/apple-assembler-foxconn-considering-iphone-factory-in-vietnam-state-media-idUSKBN1O3128" rel="nofollow">https://www.reuters.com/article/us-foxconn-iphone-vietnam/ap...</a>
shows how weak china's position is as a global competitor. a tariff on goods made in china will obviously cause manufacturers to move out of china. why wouldn't they do that? the tariffs are actually very very very effective.
If Trump's policy on putting tariff gets the support of the politicians elected after him, I guess tariffs will only follow wherever the production shifts to. This is not about only China (for now), this is about breaking the back of competition. Isn't it?