- August 31, 2023
- Posted by: Anish
- Category: Feed
As US-China relations sour, the new production sites are changing the way Apple’s devices are made. Parts are collected from multiple places then assembled in a few locations and shipped to customers everywhere. Number of suppliers in India and Vietnam have emerged as the most popular new hubs in the decade since Apple started publishing its supplier list. Each has strengthening ties with the US and an inexpensive workforce.
Data compiled by Bloomberg on more than 370 suppliers and their factory locations reveals the clearest picture that the Cupertino, California-based company’s network of producers increasingly criss-crosses the developing world. Governments in India, Vietnam and elsewhere aggressively chased their business, offering investment incentives, reforming wages, and improving infrastructure.
Alternatively, on the occasion of the 15th BRICS Leaders Summit in Johannesburg last month, the current members—Brazil, Russia, India, China and South Africa—invited Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates to join the bloc early next year. The expansion, the first since 2010, will transform the BRICS group and represent a geopolitical win for Beijing.
For years, China had sought to add new members, while countries like Brazil and India were sceptical of the move, wary that it would dilute their influence and transform BRICS into a China-led alliance. Given Beijing’s dominant role in the grouping—its economy is larger than that of all the other current members combined—it is only natural that Chinese President Xi Jinping envisions BRICS to be part of a larger number of Beijing-led initiatives, which are meant to build an increasingly China-centric global order.
Adding Iran, Egypt, Ethiopia, Saudi Arabia and the United Arab Emirates is a clear show of China’s ambition to challenge U.S. influence in the Middle East, a region Beijing increasingly views as vital.
The move also has potentially significant geopolitical implications for South America. Argentina, the continent’s second-largest economy, is set to join Brazil as a BRICS member. Both Javier Milei and Patricia Bullrich, the first- and second-placed finishers of the recent national primaries, have signalled scepticism about China, and Bullrich even announced her opposition to Argentina’s potential BRICS accession. Yet while Bullrich or Milei, if victorious, could indeed decline the invitation, Argentine business elites, keen to preserve amicable ties to Beijing, are likely to pressure them to avoid antagonizing the Chinese government at a moment when the Argentine economy is extremely vulnerable. The inclusion of Argentina in the BRICS bloc could also foster a different attitude from both the United States and the European Union toward Latin America.
India has the advantage of being seen as one of the West’s key allies in Asia—and currently fosters greater military ties to both Europe and the United States through weapons purchases and its Quad membership.
In 2012, no Apple-related suppliers operated out of India; now, the country is home to 14. The new iPhone 15 will be the first model to ship directly from India just weeks after it starts leaving factories in China.
India’s closeness to US is placing Apple at the heart of its ambitions to become a second China — a manufacturing powerhouse with a giant domestic market to boot.
Earlier this year, Apple Chief Executive Officer Tim Cook reiterated a pledge to invest in the world’s most populous nation during a meeting with Prime Minister Narendra Modi. The Indian prime minister is doing his part to encourage the relationship, with financial incentives for suppliers and steep import tariffs for companies that don’t produce locally.
The country now manufactures roughly 7% of all iPhones, tripling production in the last fiscal year. Overall, Indian electronics exports have quadrupled since 2018 to $24 billion last year.