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[Insights] The Battery Supply for iPhone 16 Might Come from India, with Safety Remaining the Top Priority
According to a news report from Financial Times, Apple has reportedly informed its supply chain, including battery suppliers such as China’s Desay Corporation and Taiwan’s Simplo Technology, of its inclination to shift the battery supply for the iPhone 16 to India. Apple is encouraging suppliers to relocate existing production capacity to India to expand production scale in the region.
TrendForce believes that, given the critical nature of battery components in terms of user safety, any error in battery assembly is unacceptable. As Apple’s certainty about production yields in India remains unclear, this move carries certain risks.
Apple Expedites iPhone Assembly Business Transfer to India to Mitigate Geopolitical Risks
As the world’s most valuable company, Apple’s supply chain strategy has always been a key factor in its success. Amidst geopolitical tensions between the U.S. and China, Apple faces significant pressure from both the investment community and U.S. policymakers to diversify its supply chain, prompting an acceleration in the transfer of iPhone assembly operations.
In recent years, Apple has been shifting part of its iPhone assembly business from China to India to mitigate production risks.
The choice of India as a manufacturing destination is influenced not only by its large and untapped population but also by proactive subsidy policies implemented by the Indian government, aiming to position India as an attractive manufacturing and export hub for multinational companies.
Additionally, the growth potential of the iPhone in the Indian market adds to the appeal of relocating iPhone production to India.
Increased Risks as Battery Component Production Shifts to India amid Uncertain Yield Rates
Analyzing the manufacturing distribution for Apple’s iPhone 15 series in 2023 reveals Foxconn’s predominant role, with only specific Plus models being produced by India’s Tata Group.
This strategic move, based on TrendForce’s insight, is inferred to be influenced by the Plus models’ lower sales performance in previous generations and their specific product positioning. Apple seems cautious about shifting production to India entirely until the production standards of Indian manufacturing facilities are confirmed, especially for models with comparatively lower demand.
In the ever-evolving landscape of smartphone components, such as core processors and camera modules, upgrades occur almost annually. However, the upgrade pace for smartphone batteries has been notably slower.
This delay is attributed to the critical importance of safety in battery components. Given the potential risks to user safety, even a minor error in battery components could lead to significant harm to a smartphone brand.
Considering this, the manufacturing distribution for Apple’s iPhone 15 series suggests that Apple might not be entirely confident in the production yield rates in India.
If the decision to shift the production of batteries, which requires a special emphasis on safety, to India is solely driven by the need to mitigate geopolitical uncertainties, it indeed poses a certain level of risk for Apple.
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