Where is the iPhone made from? The journey from components and final assembly

It’s obvious that the iPhone It is the most recognized smartphone in the globe. Apple sells nearly a quarter of a billion units annually and holds a market share close to 20%. You might be wondering, “Where is the iPhone made?” and “How does the new model reach customers so quickly?” Let’s break it down.

While it’s tempting to take the Made in China Text on an iPhone should not be taken as gospel. Not all that goes into making an Apple product is from one source.

The iPhone’s display, for example, is made by either Samsung or LG in South Korea. The flash memory and DRAM, on the other hand, likely come from Kioxia’s factories in Japan. The Gorilla glass that protects the screen from scratches could have come from a Corning plant in the USA, Taiwan or Japan. Apple’s A-series SoCmeanwhile, is custom silicon made in California by Taiwanese company TSMC. And we’ve barely even scratched the surface with this list so far.

Apple also depends on third parties to make smaller, custom-made components such as power management ICs and USB microcontrollers. These components can be sourced both from large companies like Broadcom or Texas Instruments and smaller manufacturers in Southeast Asia. Apple also has locations around the globe. tried to secure raw cobalt directly from miners to ensure that shortages don’t affect its ability to manufacture iPhone batteries.

The choice of supplier matters a great deal and it’s not just for quality control reasons either. Apple, like other Silicon Valley giants have been accused of using child labor. unethical mining practices To reduce costs. These allegations can lead to costly lawsuits and negative publicity.

Without single components, who will make the iPhone before you get it? Factories in China once assembled every single iPhone, but that’s starting to change now.

China still has the largest number of factories that manufacture the iPhone. Foxconn, the manufacturing partner, operates the largest of these factories in Zhengzhou. It employs more than 300,000 people. Many people believe that the complex is a massive building. resembles a mini city It is more than an industrial site. That’s not surprising given that Foxconn reportedly assembles over half a million iPhones in a single day here. Apple is looking to shift some production to countries such as India and Vietnam, but that won’t last forever.

Apple isn’t the only consumer electronics company that has diversified outside China of late. Other Asian countries have also seen great success for Xiaomi and Samsung. The China Plus One Strategy has become a very popular business strategy because companies are looking to lower operating costs and reduce their dependence on one region.

For foreign investors looking for manufacturing opportunities, both Asia and China offer many advantages. They also offer geopolitical and economic stability — factors that severely affected Apple’s iPhone production in China. These bottlenecks forced Apple to release a press release Warning: Delivery times may take longer

Why does Apple manufacture products in Vietnam, and why?

Vietnam is strategically located for global shipping — the country is in close geographic proximity to Apple’s existing supply chain footholds China, Taiwan and Japan are just a few examples. It has also signed free trade agreements (FTA) with other East Asian nations and is a member of Association of Southeast Asian Nations. Finally, Vietnam’s entire economy is built on exports. The country has greatly benefited from the diversification of Western companies outside China, ranging from agricultural products to clothing and electronics.

Apple is not completely new to Vietnam either — the company already assembled smaller products like wired EarPods in the country. According to a source, NikkeiIn March 2020, Apple began assembly of the AirPods in Vietnam. The higher-end AirPods followed quickly. AirPods Pro. Apple is now moving significant amounts of iPad, MacBook, Apple Watch and Apple Watch production to Vietnam.

These are the goals of the Cupertino giant, according to its manufacturing partners Foxconn Pegatron and Wistron. Local reports that the local authorities have confirmed this. news reportsAs of early 2022, Apple had begun assembly in 11 factories owned by different manufacturing companies in Vietnam. Foxconn also received a license from Vietnam to build a $270million assembly plant in Bac Giang province, which is less than 50 miles away from Hanoi. According to reports, the facility can ship eight million tablets or laptops annually.

India, Apple’s second favored manufacturing destination, offers strong incentives for local manufacturing compared to many of its neighbors. The government’s Make in India The initiative has been a huge success. It launched a $6 billion incentive program that rewards brands for setting up local manufacturing of electronic components and smartphones.

Android brands like XiaomiOppo, Samsung, and Oppo have joined the Make in India initiative using a combination of in-house manufacturing facilities and third-party manufacturing plants. Bharat FIH, Dixon Technologies, and others are examples of the latter. These companies assemble Samsung and Xiaomi smartphones.

Given these success stories, it’s no surprise that Apple aims to follow suit. It helps that Apple’s largest partner, Foxconn Technology Group, already has a strong presence India. Foxconn Technology Group has a subsidiary called Bharat FIH.

Apple’s decision to move its assembly lines to India could also increase the iPhone’s market share in the region. India currently imposes a 22% duty on imports of smartphones. This makes the iPhone much more expensive than in other Western markets.

Apple can avoid these import fees by producing locally and could pass these savings on to customers. The company has actually already used this strategy with its previous-generation iPhone models which it assembles locally. Even though the latest iPhone sells at a significant price premium in India, older models often get deep discounts — likely due to the aforementioned tax breaks.

Apple’s iPhone 14 was the first time that current-generation iPhone models were assembled in India. The company tapped Foxconn for the job, specifically the latter’s Sriperumbudur factory in the state of Tamil Nadu. However, Apple only opted to move a small percentage of its iPhone 14 production from China to India — an estimated 5% right after launch.

Even with Apple’s migration to South and East Asia, the bulk of the company’s production facilities will remain in China. Many key electronic components still come from this region. China also has a vast amount of manufacturing infrastructure. However, the country’s dominance will likely shrink over time. Still, Apple’s existing factory partners stand to benefit either way as they will continue to build and operate facilities even outside China.

We’ve already discussed why Apple may want to shift assembly to Vietnam and India in the coming years. Financial forecasts predict that the transition will take place sooner than expected. Analyst at JPMorgan said the following in a note to the company’s clients:

Vietnam is rapidly becoming the production hub of components (camera modules), and EMS for smaller-volume products (Apple Watches Macs, iPads, and iPads). It is also a major destination for AirPods manufacturing. India is the preferred location for iPhone EMS to diversify the supply chains away from China.

The analyst also predicted that Apple would move approximately 25% of its iPhone production to India by 2025 and 65% of AirPods manufacturing to Vietnam by 2025. The Apple Watch, MacBook, iPad, and MacBook could also see some assembly moving away from China.

To conclude, there’s no single answer as to where the iPhone gets made. While final assembly only takes place in two or three countries, the iPhone’s individual components and raw materials come from nearly every corner of the world.