AirPods to be made in India
Some time ago Apple made the call to offshore huge production volumes to China, so making use of cheap labour and a good tax regime. That was a great move for profitability at the time but things have changed.
Labour costs in China are no longer anywhere as favourable as they were and the main reason for still making stuff there would be because you’ve already invested in plant and machinery.
Add to that, Trump & Biden both make it clear that China may not be as friendly as we perhaps thought and the USA has turned notably more aggressive toward China than it has been for many years.
Part of this is because of renewed fears of a Chinese invasion of Taiwan, I talked about the geopolitical imperative for that to happen a few weeks back, here. And part is also because of its economic & military ties to Russia.
So we see corporate America is now starting to take all of this geopolitical stuff a lot more seriously and it is very significant that Apple has made another move away from China and, in this instance, toward India.
Nikkei Asia reports on Apple’s latest response.
Apple is asking suppliers to move some AirPods and Beats headphone production to India for the first time, in a win for the South Asia nation as it attempts to rise in the global supply chain.
The move is part of Apple’s gradual diversification from China, as it looks to lower the risk of supply chain disruptions stemming from the country’s strict zero-COVID policy and tensions with the U.S.
That’s obviously a somewhat toned-down statement and, in fact, China is facing ‘tensions’ with almost all Western countries from Australia to the UK. And it’s only going to get worse.
India superficially seems a good place to relocate, yet readers might be surprised that, for now at least, India is militarily tied to Russia, with Russia being a key arms supplier to that part of the subcontinent. The West, in fact, has had closer military ties with Pakistan and when you think about that country as a hiding place for some hardline Islamic terrorists, you’d be right to be surprised.
Anyway, the unfolding Russian debacle in Ukraine will probably demonstrate to India that it needs to arm itself with some proper Western weaponry. So India could well move more toward the West over the coming years.
Garmin // Apple
So we will soon see Airpods from India. Perhaps, for similar reasons, the next generation of Forerunners will be made in Olathe (USA) rather than Taiwan?
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