Tata Electronics, a major supplier of iPhone cases, has announced the resumption of most operations at its Hosur facility, which was shut down after a fire last week. The company confirmed in a statement on Thursday that they plan to restart work in various sections of the facility, assuring employees that they will continue to receive full pay during the transition. While investigations into the fire, which occurred on Saturday in an area where chemicals were stored, are still ongoing, experts believe that the incident will not have a significant impact on Apple’s sales during the crucial festive season.
Industry executives and analysts have pointed out that there are ample stocks of older iPhone models, which constitute the majority of sales during the festive period, ensuring sufficient supply to meet demand. This is also true for newer iPhone models, with production for the festive season typically completed in the previous quarter. The analysts have emphasized that Apple has implemented a strategy to diversify production and minimize the risk of disruptions.
Apple imports only a small percentage (5%) of the iPhones it sells in India, relying heavily on local manufacturing. The bulk of iPhone production in India is handled by Foxconn, with Tata Electronics contributing a significant portion of the remaining output. While some components for the iPhone Pro models, which are manufactured in India, may be imported, their volume share is minimal.
The impact of the fire on Apple’s overall production and sales is expected to be minimal. Counterpoint Technology Market Research’s research director, Tarun Pathak, noted that the necessary components for October shipments were likely shipped to assembly partners two weeks prior to the fire, suggesting that sales will not be affected at least until the end of October. Any delays might occur towards early November, depending on Apple’s strategy and whether the impact is focused on domestic or export sales.
The incident at the Tata Electronics facility highlights the importance of Apple’s commitment to diversifying its manufacturing base. While China remains the primary location for iPhone production, Apple is actively working to shift at least a quarter of its global production to India and other locations over the next few years. This strategic move aims to mitigate risks associated with geopolitical tensions and supply chain disruptions. Apple’s commitment to India is further evidenced by its anticipated sale of up to 13 million iPhones in India this fiscal year, generating substantial revenue for the company in one of its fastest-growing markets.
