IPhone Price Hike: Apple’s Dependence on China Under Scrutiny

Quick Summary

• Apple heavily relies on China for manufacturing its products, with over 90% of iPhones and meaningful portions of Macs (55%) and iPads (80%) being assembled there.
• For decades,Apple optimized its operations in China under Tim Cook,effectively embedding itself in the country’s manufacturing ecosystem.
• Deteriorating U.S.-China relations from trade wars,sanctions,tech bans,and COVID have exposed risks associated with this deep dependency.
• Despite geopolitical concerns, Apple has taken limited steps to diversify manufacturing-opening small assembly lines in India and Vietnam-while maintaining its heavy reliance on China’s infrastructure.

!Customers crowd an Apple store during the first day of sales for the iPhone 15 series
Image source: VCG/VCG via Getty Images

!iPhone 15 models in an Apple retail store
Image source: Apple Inc.

Indian Opinion Analysis

Apple’s partial diversification to India presents an opportunity for India as it seeks to establish itself as a global manufacturing hub. However, scaling up such operations will require significant investment into infrastructure progress to provide alternatives comparable to China’s robust ecosystem. As tariffs and supply chain disruptions continue shaping global trade dynamics, India’s potential role as a key partner for technology manufacturers like Apple coudl grow significantly.

Nevertheless, risks remain. China’s dominance over supply networks might inhibit swift relocation efforts by entities like Apple that are deeply entrenched in Chinese production systems. For India to emerge as a viable alternative destination for large-scale technology assembly lines or production plants advocating “One-China replacement strategy,” sustained policy reform coupled with advanced skill development initiatives across labor-intensive industries is crucial.

India stands at a crossroads-a stronger relationship with global tech leaders could bolster both economic growth and geopolitical leverage amidst shifting global alliances.

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