Apple to now start production of THIS major product at Foxconn Hyderabad plant next month

Apple to now start production of THIS major product at Foxconn Hyderabad plant next month

  • 16.03.2025 16:55
  • msn.com
  • Keywords: danger, success

Apple is set to begin AirPod production in India at Foxconn's Hyderabad plant from April for exports, marking their second product made locally after iPhones. This move comes amid US-China trade tensions and reciprocal tariffs.

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Estimated market influence

Apple

Apple

Positivesentiment_satisfied
Analyst rating: Buy

Apple is considering starting production of AirPods in India at Foxconn's Hyderabad plant from April this year. This move could expand Apple's manufacturing presence in India and potentially reduce reliance on exports from other regions.

Foxconn

Positivesentiment_satisfied
Analyst rating: N/A

Foxconn has approved USD 400 million to set up a factory in August 2023, which will produce AirPods for export. This investment could strengthen Foxconn's position as a manufacturing partner for Apple and contribute to India's electronics production capabilities.

Samsung

Negativesentiment_dissatisfied
Analyst rating: N/A

Apple's market share in the TWS segment is significantly higher than Samsung, which could impact Samsung's competitive position in this market.

Context

Analysis of Apple's AirPod Production in India

Key Facts and Data Points

  • Production Start Date: AirPod production will begin at Foxconn's Hyderabad plant from April 2024.
  • Product Category: This marks the second product category (after iPhones) that Apple is manufacturing in India.
  • Investment: Foxconn approved USD 400 million (~Rs 3,500 crore) to set up the factory in August 2023.
  • Market Share: Apple leads the global TWS market with a 23.1% share in 2024, compared to Samsung's estimated 8.5%.
  • Import Duty: India imposes a 20% import duty on hearables and wearables, while the US has nil duty on these products.
  • Proposed Tariff Changes: ICEA suggests waiving import duties on smartphones, hearables, and wearables from the US to benefit India.

Market Trends and Business Implications

  • Global Supply Chain Shift: Apple's decision reflects a strategic shift in production to reduce costs and avoid potential tariffs. This aligns with its announcement of USD 500 billion investments in US manufacturing.
  • Reciprocal Tariffs Impact: The move comes amid speculation that Apple may reduce production in China due to reciprocal tariffs announced by the Trump administration, which include penalties on Indian imports starting from April 2, 2024.

Competitive Dynamics

  • Market Leadership: Apple's dominance in TWS (True Wireless Stereo) devices is significant, with a market share nearly three times that of its nearest competitor, Samsung.
  • Strategic Manufacturing: By diversifying production to India, Apple aims to leverage lower costs and strategic regulatory advantages, potentially undercutting competitors in the global market.

Long-Term Effects and Regulatory Considerations

  • Job Creation: The move could lead to job creation in India's manufacturing sector and strengthen its position as a global electronics hub.
  • Regulatory Arbitrage: The proposed waiver of import duties on US products could influence India's regulatory framework, potentially affecting the competitive landscape for tech companies.

Strategic Considerations

  • Supply Chain Resilience: Expanding production in India enhances Apple's supply chain resilience and reduces dependency on China.
  • Cost Efficiency: Lower labor costs and potential duty benefits make India an attractive manufacturing destination for premium electronics like AirPods.

This strategic shift underscores Apple's commitment to diversifying its global manufacturing footprint while addressing geopolitical and economic challenges.