News that Apple (AAPL) has started production on its next-generation iPhone 15 in India is further evidence the Club holding is strategically reducing its manufacturing risks by pivoting from China and investing in a core emerging market. Taiwanese electronics manufacturer Foxconn Technology Group, which has long produced iPhones at plants in mainland China, is developing the latest devices from its facility in Tamil Nadu, India, Bloomberg reported Wednesday, citing people familiar with the matter. The India factory should begin delivery of the new smart phones just weeks after they start shipping from China, according to Bloomberg. The report comes as Apple is ramping up production of iPhones in India, while reducing its reliance on manufacturing in China following Covid-19 disruptions and increasingly strained relations between the U.S. and China . “We like this update because it not only shows Apple is diversifying its supply chain away from China — with tensions between Washington and Beijing only heating up — but will also more deeply embed Apple into what is likely to be its next major growth market,” said Zev Firma, portfolio analyst at the Investing Club. “That presence should help the company gain mind share with the Indian consumer and favor with [Indian] Prime Minister Narendra Modi’s administration,” he added. Apple has been gradually expanding its operations in India. CEO Tim Cook told CNBC earlier this year that India represents a “huge opportunity” for the company. In April, Apple opened its first retail outlets in the country, in Mumbai and Delhi, attempting to grab market share in the world’s most populous country. Sales for the iPhone in India grew by double-digits in the second quarter , to a record high, according to Apple. Meanwhile, Wall Street is optimistic on Apple’s expansion into India. Morgan Stanley last month forecasted that Apple’s revenue in India could grow by seven times current levels over the next 10 years, to around $40 billion. India’s macroeconomic backdrop is “more favorable for Apple than it’s ever been, with years of economic reform, a growing local manufacturing base, and improving electrification/digitization of the economy,” Morgan Stanley analysts wrote in a note. AAPL YTD mountain Apple (AAPL) year-to-date performance Overall, Apple’s efforts to expand in India present a huge growth opportunity for the U.S.-based firm from both a manufacturing- and sales perspective. India’s growing middle class is likely to only bolster Apple’s customer base as more citizens are able to afford iPhones over time. Moreover, Apple’s move to diversify its supply chain is a tactical step to mitigate against risks from deteriorating U.S.-China relations and China’s stalling economic recovery. Neither Apple nor Foxconn immediately responded to requests for comment from CNBC on Wednesday. (Jim Cramer’s Charitable Trust is long AAPL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Apple’s first physical retail store is located in the populous city of Mumbai.
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News that Apple (AAPL) has started production on its next-generation iPhone 15 in India is further evidence the Club holding is strategically reducing its manufacturing risks by pivoting from China and investing in a core emerging market.