Report Examines Challenges Apple Has Faced in Expanding Manufacturing in India
The Information has published a detailed look into the challenges that Apple has faced in expanding its manufacturing operations in India, including strict labor laws, unsatisfactory health and safety standards, and protectionist trade policies that have resulted in rising tariffs on smartphone components.
An excerpt from the paywalled report:
For example, one Indian supplier Apple approached in 2018 was Superpacks, which operated a packaging factory in Bangalore. Apple sent auditors to assess whether its supplier responsibility practices were up to Apple's standards. The audits revealed dozens of violations. The site had no safety measures for storing chemicals, lacked monitoring for noise and wastewater, and didn't have several environmental and construction permits. It didn't properly test drinking water for workers and the site lacked a fire hydrant system, according to a person close to Apple.
Apple spent months pushing Superpacks to fix the violations. However, the Indian company stopped giving updates and missed deadlines for fixes. Apple ultimately didn't give it a business contract. Superpacks didn't respond to a request for comment.
Apple has reached agreements with some suppliers in India, such as Wistron, which assembles the iPhone 7 in the country. However, the majority of Apple's manufacturing remains in China, with recent issues such as the U.S.-China trade war and the COVID-19 coronavirus outbreak emphasizing the need for diversification.
As the report notes, India recently relaxed rules on local sourcing of components, paving the way for Apple to open an online store in India later this year and its first retail store in the country by next year.
Full Article: Inside Apple's Search for an Indian Supply Chain by The Information
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Top Rated Comments
This is a real head scratcher!
- Tim Apple
A real American Patriot
/s
I am still searching for the American who wants and trains their kids to work in an assembly plant. There are countries where it is the parent's dream that their child could work in an environment with American safety standards.
Americans who want manufacturing to happen in America are not willing to work in a manufacturing plant. That is the real head scratcher.
Do you think there are enough Americans who can do this?
Do schools here train for something like this? At least are there enough Americans who want to do this for a living and are willing to train for this?
Please understand that manufacturing is a super low income, super hard job. America can and does provide better opportunities. That is why no one here is willing to work in an assembly line. And that is a good thing. Don't let politicians fool you otherwise.
For all the newcomers, Apple used to manufacture all their computers in the USA, in California (! believe it or not, in Fremont) and Colorado (Fountain). But yes, computers cost a LOT more back then. Then again, manufacturing was very different back then too, much more costly and labor intensive, not as automated. I am somewhat dubious of claims that Apple could not manufacture in the US today; I think that claim comes with a very big *, which is "at the very high profit margin they want". But when analysts like iSuppli/IHS put the labor cost for iPhones at around $2, you really have to wonder… the average hourly Chinese factory worker makes $3.60/hour (yes… really) so are we really saying Apple couldn't get Americans to buy iPhone for an extra $50 that used non-near-slave-labor?? They charge $100 to go from 32GB to 64GB, and that's like $4 of chip cost delta. I'd happily pay up for the 128GB model if I knew it was manufactured in the US. And I'm not anti-Chinese; I'm just pro-American laborer/economy. (Not to mention the logistics cost-benefit of shipping within a primary market vs putting inventory on a supertanker for an ocean voyage.)
The problem isn't really American capability, it is 100% due to business and accounting decisions and profiteering. Simple as that.
Timmy can't exploit prison labor, so no iPhones manufacturing in the US. Forget about it. ('//www.youtube.com/watch?v=I5smk-U0WkA')