The latest news on Thursday from Caixin shows that the company's supply chain ecosystem has undergone a significant change - the controversial Indian supply chain has begun mass production of the new iPhone, which will be released in early September. $Apple (AAPL.US)$ The company's supply chain ecosystem has undergone a significant change - the controversial Indian supply chain has begun mass production of the new iPhone, which will be released in early September.

Insiders revealed that the current assembly line in India is not only assembling the entry-level iPhone 16, but also taking on some orders for the Pro models.

In the background, the latest and high-end models of iPhones have always been produced by Chinese factories, with Indian suppliers only able to pick up some low-end or old model orders. This is why the Chinese and Indian factories working together to assemble the latest iPhone can be considered the biggest change in Apple's supply chain this year.

The core of the industry chain still remains in China.

According to the supply chain news, the Indian factory has assembled a total of 30 million iPhones in the past year, with 18 million assembled in just the first half of this year. In addition to supplying the Indian domestic market, these devices will also be exported to overseas markets, with the main destination being the USA.

So it is not difficult to imagine that when the new iPhone is launched in September, American consumers this year may be able to buy iPhone 16 models assembled in both China and India at the same time. For the "India Fruit Chain" supported by Apple's efforts, this is undoubtedly significant progress.

However, some analysts also pointed out that due to the limitations of India's manufacturing industry, the country can currently only provide some supply chain diversification for mainstream consumer electronics brands like Apple, while helping them penetrate the Indian market. In the first quarter of this year, Apple's shipment volume in India increased by 19%, driving revenue from the Indian market to a historic high. In the high-end smartphone market in India (priced above $800), Apple holds a 69% market share, while Samsung holds the remaining 31%.

However, for the 'India Fruit Chain', there are still some difficulties in achieving greater progress.

According to Ivan Lam, an analyst at technology research firm Counterpoint Research, the growth of India's (supply chain) in the coming years will mainly be limited to the assembly of final products. The production of more valuable electronic and mechanical components will still be concentrated in China. Although India has made some progress, its efficiency, infrastructure, and talent pool are still unable to match China.

Sources point out that the progress of Apple's support for the 'Fruit Chain' in India has not been smooth sailing. There are also issues such as a long learning curve and slow entry of component and parts suppliers into the Indian market. Meanwhile, Apple suppliers importing equipment and talent to India often face strict scrutiny from the Indian government, making the expansion of the Indian supply chain more difficult.

A supply chain executive revealed that during the launch of new products, Apple still prefers to prioritize the stability of the supply chain. Most of the iPhone Pro series orders are still allocated to production in China to ensure a smooth supply chain before the US 'Black Friday' shopping festival in November.

The controversy surrounding the Indian 'Fruit Chain' continues.

For international public opinion, compared to the recent increase in production capacity of the Indian 'Fruit Chain', perhaps more attention-grabbing are a series of negative news.

For example, in June of this year, a British media outlet published an investigation showing that Foxconn, which has its factories in India, 'systematically excludes married women' when recruiting employees, as they have greater family responsibilities. Apple and Foxconn only admitted to 'recruitment mistakes' in the past (2022), but emphasized that corrective actions have been taken against improper behavior by intermediaries.

Even more interesting is the recent rumors about the 'low yield rate of Indian factories'. Foxconn Chairman Liu Young-Way was forced to publicly respond, saying that 'many of the claims are not true'. He said that if the yield rate of Indian factories was only 50%, 'I would have withdrawn long ago'. Of course, what concerns the investment market is that Liu Young-Way only provided a general description and did not give specific numbers.

Editor/Emily