iPhone supply in India may not suffer as China ups Covid-19 curbs: Experts

Apple has started manufacturing device in India and festival-time demand for device is falling

The supply of Apple Inc’s iPhones in India may not suffer as China tightens curbs to contain the spread of Covid-19, according to market experts who see an impact of less than 5 per cent.

Apple supplier Foxconn’s main plant in central China’s Zhengzhou city was recently put under stringent Covid-19 measures and that could affect global output of iPhones by as much as 30 per cent, said a report by Reuters.

The company produces 70 per cent of iPhone shipments globally and much of its output comes from Zhengzhou. However, the company has started making the device in India and according to experts this may somewhat allay concerns of a shortfall.

“We do not see a big impact on India. The impact is likely to be less than 5 per cent as most of the iPhones are now assembled in India. Additionally, the zero-Covid policy in China, as highlighted by the president, is here to stay and we are likely to see the impact on markets where the volumes are high,” said Tarun Pathak, research director at Counterpoint Research.

“Since iPhones are now also being built in India, there is an opportunity for India to pick up some of the slack to meet demand, although scaling up production this quickly would be difficult,” said Faisal Kawoosa, founder of Indian research firm Techarc.

Another reason why Apple iPhone sales may not hit India hard is that the festive season has ended and demand for the device is expected to fall.

“This is not a very important period for sales in India. We might see a slump in demand for iPhones in the Indian market with the festival season at an end,” said Kawoosa.

India has a relatively smaller iPhone customer base compared to markets like North America and Western Europe.

The slump in demand is likely to hit the US and European markets much harder, experts said.

“With Christmas coming up, this is a vital period for European and American markets where a slump in supply is imminent. Consumer sentiment in US and European markets are not very high right now due to inflation. Even production is impaired,” said Techarc’s Kawoosa.

Upasana Joshi, research manager, client devices, IDC India said, “Even if local manufacturing has scaled up significantly for iPhones in India, we still depend on imports of components from China, which is likely to continue till we start sourcing locally. Further, shutdown or temporary closure of a factory in China, especially with the likes of Foxconn, will impact the already strained supplies of new iPhones globally.”