Several years ago, employees at Apple investigated whether components for the iPhone could be made in India. The results weren’t encouraging.
While the employees found some companies that could make power adapters or packaging, none could make phone speakers, headphones or small mechanical parts. Many Indian suppliers weren’t able to meet Apple’s environmental, health and safety standards. Apple contractors visited one potential factory in the southern Indian state of Karnataka, only to find that its workers were on strike. Some of Apple’s existing suppliers said they weren’t interested in manufacturing in India because of the investment required, The Information has learned.
These episodes demonstrate what is increasingly a critical challenge for Apple: how to diversify its production away from China. While Apple has made slow but steady progress diversifying into places like Vietnam, where some suppliers make AirPods and organic light-emitting diode displays, the vast majority of its components are still made in China, according to people familiar with the matter.