Core Insights - Apple's latest Vision Pro headset has made significant production adjustments, moving assembly to Vietnam while still relying on China for some components [1][2] - The shift in production reflects Apple's strategy to reduce dependence on Chinese manufacturing, particularly for products aimed at the U.S. market [1][2] Production Changes - The new Vision Pro, equipped with the M5 processor, is assembled in Vietnam, contrasting with the first-generation model which was made in China and featured the M2 processor [1] - It remains unclear whether all Vision Pro units are produced in Vietnam or if some configurations are still manufactured in China [2] Broader Manufacturing Strategy - Apple is diversifying its production locations, having moved a significant portion of iPhone manufacturing to India to avoid new tariffs on Chinese goods [2] - The company is also producing a majority of AirPods and Apple Watch in Vietnam, along with some iPads and HomePods [2] - Apple has expanded production to Thailand and Malaysia for certain Mac models and has reached an agreement with Indonesia to produce components for AirPods Max [2] - Additionally, Apple is increasing its domestic production in the U.S., planning to manufacture glass covers for all iPhones and Apple Watches sold globally [2]

Core Insights - Apple has shifted more iPhone assembly operations to India, making India the largest source of smartphones for the U.S., surpassing China for the first time [1][2] - According to Canalys, India accounted for 44% of the U.S. smartphone market share in Q2, while Samsung's main production base in Vietnam held 30%, and China ranked third [1] - The significant change is attributed to Apple's increased production capacity in India and smartphone manufacturers stockpiling due to tariff concerns, with Indian-made device shipments more than doubling year-on-year [1] Market Dynamics - Apple's iPhone shipments to the U.S. decreased by 11%, indicating a disruption in the regular shipping cycle due to earlier stockpiling [1] - Despite manufacturers stockpiling, the overall market growth was only 1%, suggesting weak market demand amid worsening economic conditions [1] Production Diversification - Apple and other manufacturers are diversifying production to countries like India and Vietnam to mitigate risks associated with tariffs and geopolitical tensions [2] - Although Apple still produces most iPhones in China and lacks a smartphone production line in the U.S., it has committed to hiring more employees domestically and investing $500 billion over the next four years [2] Production Efficiency - The yield rate of iPhone production in India is approximately 10% lower than that in China and Vietnam, influenced by factors such as worker efficiency and supply chain maturity [2]

Group 1 - Apple's main manufacturing partner, Foxconn, exported 97% of iPhones from India to the US between March and May 2023, significantly higher than the average of 50% in 2024, indicating Apple's efforts to avoid high tariffs imposed by the US on China [1] - During the same period, Foxconn exported iPhones worth $3.2 billion from India, with nearly $1 billion in May alone, following a record $1.3 billion in March. In total, Foxconn exported $4.4 billion worth of iPhones to the US in the first five months of the year, surpassing the projected $3.7 billion for the entire year of 2024 [1] - Apple is accelerating production in India, including airlifting $2 billion worth of iPhone models to the US and lobbying to reduce customs clearance time at Chennai airport from 30 hours to 6 hours, which is a key hub for iPhone exports [1] Group 2 - Counterpoint Research forecasts that by 2025, iPhones manufactured in India will account for 25% to 30% of global iPhone shipments, up from 18% in 2024 [2] - Former US President Trump expressed dissatisfaction with Apple's manufacturing in India, demanding CEO Tim Cook to halt operations there and threatening tariffs on the company [2] - If Trump’s policies are enforced, the cost of "American-made" iPhones could increase significantly, with estimates suggesting a price rise of at least 25%, potentially reaching $3,500, nearly double the current price [2]

Core Viewpoint - The "Make in India" initiative is driving a 6% year-on-year growth in smartphone shipments in 2024, primarily fueled by the export growth of Apple and Samsung, which together account for approximately 94% of India's smartphone exports [1][4]. Group 1: Market Dynamics - Samsung maintains its leading position in India's smartphone manufacturing with a 7% year-on-year growth in shipments, supported by a 13% increase in exports [4][7]. - Foxconn Hon Hai's shipments in India grew by 19% year-on-year, driven by the strong performance of iPhone 14, iPhone 15, and iPhone 13 models [4][7]. - Tata Electronics emerged as the fastest-growing smartphone manufacturer in India in 2024, with a remarkable 107% year-on-year growth, largely attributed to the iPhone 15 and iPhone 16 [4][7]. Group 2: Future Projections - The Indian smartphone manufacturing sector is expected to achieve double-digit growth in 2025, bolstered by government initiatives and the diversification of global supply chains [5][6]. - The local value addition in smartphone manufacturing is anticipated to increase continuously, making India an attractive manufacturing hub due to its large domestic market and low labor costs [5][6]. Group 3: Competitive Landscape - Vivo ranks second in the market with a 14% year-on-year growth, benefiting from the expansion of offline retail channels and a strengthened distribution network [7]. - OPPO faced challenges in 2024, with a 34% decline in shipments due to intense market competition and increased reliance on contract manufacturing [7]. - Dixon became the largest manufacturer in the overall mobile device market, driven by partnerships with Transsion and Motorola, achieving a 39% year-on-year growth in smartphone shipments [8].