iPhones Set for Takeoff from New Foxconn Unit
Apple's Taiwanese contract manufacturer Foxconn is poised to begin shipments of iPhones from its new unit in Karnataka as early as June, according to people aware of the developments, who said final checks are ongoing to start commercial shipments.
Last week, 'a senior Apple operations executive from its headquarters in Cupertino visited both of its suppliers — the Foxconn unit in Bengaluru as well as the Tata Electronics facility in Hosur to check the progress and preparedness of the plants ahead of the upcoming launches,' said a person cited above.
The visit by the Apple executive to the sprawling 300-acre Foxconn facility in Devanahalli on the outskirts of Bengaluru was timed as a review of operations ahead of the likely launch of iPhone shipments next month.
The new plant is set to emerge as the second-largest Foxconn facility, after its Chinese unit, for the manufacturing of the iconic iPhones. 'Foxconn's unit in the Devanahalli Information Technology Investment Region (ITIR) is almost ready for launch,' said MB Patil, Karnataka's minister for large and medium industries, who expects the commencement of operations to boost state's prospects 'for attracting more foreign investment without compromising the interests of any stakeholder'.
Queries sent to Apple, Foxconn and Tata Electronics remained unanswered till press time.
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These developments come even as Apple faces pushback from Washington DC for its manufacturing push in countries like India and China. On Thursday, US President Donald Trump said that he has asked Apple CEO Tim Cook to not build and expand the company's manufacturing operations in India.
However, the government officials and suppliers alike say plans remain on track, adding that there has been no communication from Apple to halt or pause the diversification of contract supply away from China, as ET reported on Friday.
'We believe that Apple could ramp up iPhone assembly production in India up to 60-65% by Fall in a best-case scenario but could easily pivot back to a China-driven iPhone strategy depending on the tariff situation and deal negotiations,' Dan Ives, an analyst at Wedbush Securities said in a report on Friday.
'We see no chance that iPhone production starts to happen in the US in the near term given the upside-down cost model and Herculean-like supply chain logistics needed for such an initiative,' he wrote.
To be sure, analysts expect more pressure from the Trump administration on Apple to build iPhone production in the US. However, any such move would result in an inflated iPhone price point of about $3,500, making the proposition a non-starter for the Cupertino-based company.
'Foxconn will have to ramp up its India capacity by at least five times,' said Neil Shah, vice president at Counterpoint Research, 'with almost all iPhones for the US market likely to be produced in India, depending on how the sanctions negotiations go and if Apple plans to move to India completely.'
The Taiwanese firm would want the production to take off from the Bengaluru plant as soon as possible as it is 'critical for Foxconn to maintain a lion's share of iPhone production and PLI incentives,' Shah said.
ET reported on March 31 that Foxconn was planning to produce up to 25-30 million iPhones at its India plants in 2025, more than double it made last year.
The company had been conducting limited trials at its Bengaluru campus for about four months at the time, progressing swiftly towards the 'revenue build' phase where the phones were ready to be shipped.
Earlier on May 1, Apple CEO Tim Cook said that for the June quarter, the company expects a majority of iPhones sold in the US to have India as their country of origin.
Foxconn has operations across Tamil Nadu, Karnataka and Telangana. Apart from the Bengaluru unit, the Taiwanese major has opened a new unit in Hyderabad to make AirPods, reflecting the widening of the Apple portfolio in India. This is in addition to its existing large-scale operations at its Sriperumbudur campus near Chennai where the bulk of iPhone assembly takes place currently.
Apple's other major supplier Tata Electronics, which has a facility in Hosur, makes enclosures for iPhones. The electronics manufacturing arm of the Tata Group has been scaling expeditiously and has acquired the Indian arms of other Apple suppliers — Wistron and Pegatron.
'We believe Apple has put itself in a very hedged supply chain strategy heading into iPhone 17 production this Fall,' said Ives.
'All of our work in the supply chain throughout Asia over the past few weeks gives us a high level of confidence that Cupertino's aggressive push towards India production has been a very smart strategic move given the uncertain tariff environment facing Apple in China,' he said.
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