Apple officially launched the new iPhone 17 series, featuring the most significant visual changes for Apple in five years, but the bigger changes are at the supplier level.

Bloomberg reports that Apple plans to manufacture the entire iPhone 17 series for the US market at five factories in India. This marks the first time Apple has committed manufacturing of an entire new product line to India during a global launch.

Since becoming Apple's CEO, the business-savvy Tim Cook has consistently mitigated supply chain risks. The geopolitical risks ignited by Trump's presidency have accelerated Apple's shift in supply chain operations.

According to a Canalys report from the end of July, smartphones assembled in India accounted for 44% of US imports in the second quarter of 2025, a significant increase from 13% last year.

Apple is a leading factor in the growth of manufacturing in India. Over the past few years, it has continuously shifted its supply chain to India and shipped Indian-made phones to the US market.

Canalys senior analyst Bjorhovde stated that nearly 80% of iPhones sold in the United States in the second quarter were manufactured in India.

Many of Apple's product lines are entering new iteration cycles. In the coming years, Tim Cook will continue to strike a balance between high quality, low costs, and reducing dependence on China.

"Apple's Plan B"

After Trump took office, Cook established a strict "3+3" rule for Apple: each Apple product line must have three suppliers in China and three outside of China.

Driven by the dual needs of mitigating geopolitical risks and dispersing supplier influence, Apple's global supply chain migration will only accelerate, not cease.

Under this strategy, India, Vietnam, and Brazil have already begun taking over manufacturing for some product lines.

The five manufacturing plants for the iPhone 17 in India include:

• Tata Group's Hosur plant;
• The former Wistron plant in Karnataka (acquired by Tata Group);
• Foxconn's plant in Tamil Nadu;
• Devanahalli plant;
• Chennai plant.

Among them, the Tata Hosur plant is a brand new facility, characterized by high automation and high yield rates. It is primarily responsible for producing the iPhone 17 Pro model. Bloomberg reports that this locally controlled factory will contribute half of India's iPhone production over the next two years.

Foxconn's Devannahalli plant near Bengaluru Airport is its second-largest facility globally, in which Foxconn has invested nearly $2.8 billion.

We are all familiar with India's advantages: low labor costs and a plentiful labor force. Its disadvantages include poor infrastructure, a weak supply chain, and insufficient worker skills.

Over the past decade or so, Apple has consistently invested in the growth of Chinese Apple supply chain companies, helping them improve production techniques and standardize processes, ultimately fostering a mature industry ecosystem.

Although India's manufacturing yield rate remains lower than that of China, through continuous technology transfer and workforce training, India is mastering the full-process management capabilities from product design to large-scale mass production—a capability that has been almost exclusively possessed by China for over a decade.

Clearly, Apple aims to replicate China's successful model in India. Apple's supply chain shift strategy, from primarily manufacturing in China to increasing the share of manufacturing in India, is far from over. The changes with the iPhone 17 are just the beginning.

"It's Hard for India to Replace Made in China"

Although Apple has relocated some assembly processes to Southeast Asia, China maintains a leading position in high-value-added sectors (such as chip packaging, optical components, OLED panels, and precision machinery), with a significant overall supply chain advantage.

Given that Apple still relies on a large number of Chinese suppliers (such as Goertek and BYD Electronics) for core components, in the long run, China may reduce its role as an "assembly workshop" and become more of a "core component and high-end manufacturing center."

On the other hand, domestic companies are also expanding globally, shifting from "passive relocation" to "active expansion."

From Luxshare Precision, Pegatron, to Lens Technology, many Apple supply chain companies have already established their own factory campuses in Southeast Asia, striving to achieve localized supply.

It's difficult for India to replace Made in China quickly because its disadvantages remain significant, including a lack of infrastructure and supply chain support, such as localized components, power reliability, and efficient logistics and transportation.

If these shortcomings cannot be quickly addressed, India may remain confined to the production and assembly stage for a long time, struggling to establish a true core ecosystem for the supply chain.

According to a previous Reuters report, the cost of iPhones produced in India is still 5-10% higher than those produced in China. Factory quality control and worker numbers are relatively low, and the yield rate is likely to be lower than that of Chinese-made iPhones.

Thus, for now, India cannot immediately replace Chinese manufacturing, and the majority of products sold to other countries and regions around the world will still be made in China.

As Apple expands its supply chain, a multi-center model may emerge in the future, with China (high-end components and partial assembly), India (some mobile phone assembly), and Vietnam/Thailand (headphones, tablets, and accessories assembly).

A similar model emerged in the automotive industry in the 20th century, with Japan, the United States, and Germany leveraging their respective strengths to divide the supply chain.

"Supply Chain Adjustments Impact R&D and Innovation"

For Cook and Apple, the regionalization and diversification of the supply chain also means an exponential increase in management difficulty. Without strong execution and a strong governance structure, they risk falling into the double trap of "decreased efficiency and rising costs."

It is also worth noting that Apple's new products in the past decade or so have typically relied on extremely complex manufacturing processes. For example, the iPhone's Face ID, the Apple Watch's miniaturized design, and the Vision Pro's ultra-high-precision optical components all require suppliers to deliver high-quality finished products on a timely basis.

After all, one of Apple's core competitive advantages is its ability to deliver a new generation of products with consistent quality every year, a fundamental pillar of the capital market's trust in Apple.

If a foundry's yield rate is low, it means: production lines will take longer to ramp up, large-scale shipments won't be achieved within the new product launch window, and even mass production capacity could hinder R&D efforts.

If this problem arises, it will undoubtedly have an indirect impact on Apple's product strategy, leading to a more conservative approach to product innovation.

The result is that Apple may favor "incremental innovation" during the transition period—minor cosmetic changes and performance improvements—rather than radical design revolutions.

For example, the iPhone will strive to extend the lifecycle of a single architecture, rather than introducing disruptive new processes every few years.

For truly revolutionary new products, such as the Vision Pro and the potential foldable iPhone, they will continue to rely on the high yield and maturity of Chinese manufacturing for a long time.