In a significant move towards diversifying its manufacturing operations, Apple is reportedly set to start AirPods production at its Foxconn plant in Hyderabad, India. The production will initially be limited to exports and is expected to begin as early as April 2025. This development follows Apple's ongoing efforts to reduce its reliance on China as a manufacturing hub amid rising trade tensions.
Apple’s Diversification Strategy: Shifting AirPods Production to India
Apple has been steadily shifting its manufacturing operations beyond China, and the move to assemble AirPods in India is a part of that larger strategy. According to a PTI report, citing an unnamed industry source, this is the second major Apple product to be assembled in India, with the iPhone series being produced in the country since earlier years.
Apple is already assembling select iPhone models in India through its key suppliers, including Foxconn, Pegatron, and Tata Electronics. The introduction of AirPods production in India represents a significant step in the company's efforts to diversify its supply chain and safeguard its manufacturing processes from geopolitical disruptions.
Investment and Production Capacity
Foxconn, one of Apple’s key manufacturing partners, has already made a $400 million investment in its Hyderabad facility for AirPods production. This facility is poised to play a crucial role in Apple's efforts to scale up production outside China. While the initial focus will be on exports, this move could set the stage for future expansion, including potential production for the domestic Indian market.
Apple's Dominance in the TWS Market
Apple’s AirPods lead the True Wireless Stereo (TWS) earphones market globally, holding an impressive 23.1% market share as of 2024, according to a Canalys report. This market share is more than three times larger than Samsung, which ranks second with an 8.5% share. The success of AirPods has made them a cornerstone of Apple’s wearables business, and moving production to India could strengthen the brand’s competitive edge in the growing TWS market.
Strategic Importance for Apple
This production shift to India comes amidst increasing global trade tensions, especially between the US and China. Apple has faced challenges due to reciprocal tariffs and rising costs of production in China. By increasing production in India, Apple aims to diversify its supply chain, reduce reliance on Chinese manufacturing, and potentially mitigate risks associated with geopolitical instability.
In addition to AirPods, Apple has also been manufacturing all models of the iPhone 16 series in India, including the newly launched iPhone 16e. These iPhones are not only available for sale in India but also for export to global markets. This expansion in India’s manufacturing capabilities showcases the country’s growing role as a key production hub for Apple.
Apple's Investment in the US and Global Expansion
Apple’s investment in its US production operations remains significant, with a $500 billion (roughly Rs. 43,61,100 crore) investment plan for its US-based operations, particularly to counter the reciprocal tariffs imposed by the US government on Chinese goods. Despite these moves, the shift to India for producing AirPods is an indication of Apple’s commitment to increasing its manufacturing footprint outside of China.
Conclusion
Apple’s decision to produce AirPods in India at Foxconn’s Hyderabad plant is part of its broader effort to diversify its supply chain and lessen its dependence on China. This move will help Apple maintain its position as a leader in the global TWS market while mitigating risks associated with global trade tensions. As Apple continues to expand its manufacturing operations in India, it reinforces the country’s importance as a major hub for Apple’s global production strategy. With investments in both India and the US, Apple is ensuring its operations are resilient to global challenges, paving the way for further growth in the coming years.