Apple is having serious problems with iPhone production shipped from factories in India, with rejection rates on quality criteria as high as 50% for key components such as the phone’s case.
The fact that India doesn’t produce many truly high-tech components, such as chipsets and high-end displays, is probably a good thing. According to an analysis by the Financial Times, the factory run by conglomerate Tata Group and contracted by Apple to make iPhone cases is still far from achieving the ideal of 0% manufacturing defects for supplied sub-assemblies. Instead, up to 50% of manufactured iPhone cases end up directly in landfill, or at best in recycling, with the finished product failing to meet Apple’s strict quality requirements.
Trying to escape the uncertain political and economic climate, Apple is working hard to reduce its dependence on Chinese suppliers and OEMs. But for now at least, poorly developed local infrastructure and a lack of experience among manufacturers in regions like India are creating problems for the American company.
It also appears that the attitude of Indian suppliers is very different from the “can do” approach of Chinese companies, with one former Apple engineer saying there is no sense of urgency in its Indian supply chain:
At an iPhone casing factory in the Hosur region run by Indian conglomerate Tata, almost one in two components coming off the production line is in good enough shape to eventually be sent to Foxconn, Apple’s assembly partner for building iPhones.
Production yields that barely reach 50% are in stark contradiction to Apple’s goal of reducing to zero defects. Two people who have worked in Apple’s offshore operations said the factory has a plan to improve skills, but the road ahead is long.
Former Apple employees said Chinese suppliers had a totally different attitude, seeking to exceed the Cupertino company’s expectations. On several occasions, a Chinese supplier would be given a task expected to take several weeks and would do it literally the next day.
Still, there is room for optimism about the resilience of Indian companies, relative to the high quality standards demanded by a company of Apple’s stature.
In addition to iPhone cases, Apple has also started manufacturing the famous AirPods earphone cases in India, which are being sent to China for assembly of the finished product for the time being.