From China to India: The Asian Engine Behind Apple’s Rise 

Apple celebrated its 50th birthday on April 01 this year, is the most respected tech company in the world. According to Brand Finance, Apple has remained the world’s most valuable brand since 2024, with its brand value surging to $608 billion in 2026—exceeding the market capitalisation of nearly all non-tech companies and even the GDP of many countries. Apple has earned a reputation for being very secretive about its business practices. However, when you look at the many stories that have been written about Steve Jobs‘ rise at Apple from almost bankruptcy in 1997 to being the most valuable company in the world by the time of his passing in 2011, the majority give him full credit for both product vision and design.  

Apple’s evolution reflects a global journey of ideas and capability: from 1945 to 1960, the United States taught Japan modern manufacturing; from 1960 to 1980, Japan refined it into world-class excellence; from 1980 to 1997, the United States rediscovered and adapted those methods; and from 1997 to 2007, Apple absorbed and synthesised it all into products it could seamlessly produce. 

Eventually, the full American manufacturing model was expanded throughout Asia. Today, this cycle continues: the US is heavily investing in manufacturing again, Southern India is emerging as a tech hub, and China is working diligently to maintain its manufacturing dominance.  

As of 2025, Apple’s manufacturing remains overwhelmingly concentrated in Asia, with an estimated 85–90% of its production ecosystem based there. With China remaining the backbone and India emerging as the fastest-growing manufacturing hub. Not only that, but Asia has also become the company’s pivot, accounting for approximately $126.8 billion (30.4%) of its total $416.2 billion in revenue, including Greater China, Japan, and the rest of Asia-Pacific. 

Japan’s Manufacturing Philosophy 

Apple’s rise to the world’s most valuable tech company can partly be attributed to its outstanding product offerings; the company has achieved success by producing an iPhone for $1200 worldwide at a very low level of production defect rate. This is a result of utilising a manufacturing philosophy rooted in Japan rather than one developed in Silicon Valley. 

Inspired by Japan‘s manufacturing excellence, Steve Jobs was committed to quality, which helped Apple become an innovation powerhouse. Apple has developed many products that stand out for their design and creativity; however, its real strength lies in its ability to produce high-quality products across multiple manufacturing locations worldwide, mainly in Asia. 

Apple’s early years were marked by difficulty in scaling up production, a problem insiders called “manufacturing hell“. After years of learning and refining the operational systems it put into place, Apple adopted many of the principles used in traditional Japanese companies (kaizen) and made the transition from experimentation to producing large quantities of precision-made items within the same timeframe as the other major computer companies.  

Over the last decade, the dominance of Japanese-affiliated firms in Apple’s supply chain has gradually diminished, with their share declining by 5 percentage points. While Japan has lost its share, Apple has also utilised regional strengths throughout Asia and expanded its supply chains in China, Taiwan, and South Korea. However, over the last 10 years, India has emerged as a manufacturing hub for Apple, highlighting India’s contribution to Apple’s global growth.  

China’s emergence as Apple’s Global Manufacturing Hub 

Apple’s manufacturing base in Shenzhen, China, built over the past 25 years, is far more than an assembly line—it represents the culmination of decades of global knowledge transfer. This deeply complex ecosystem is extraordinarily difficult to replicate elsewhere. 

China has been Apple’s important manufacturing hub for over two decades. Its vast skilled workforce, tightly integrated supply chains, and strong infrastructure—supported by government investment—have enabled unmatched speed and efficiency in production. Large-scale operations by partners like Foxconn enable Apple to ramp up output for global product launches rapidly. This “China speed” has been critical in helping Apple meet worldwide demand at scale while maintaining high profitability.  

Asia—and particularly China—was an integral part of this transformation, providing Apple with a large, highly disciplined labour force and a government willing to subsidise and establish special economic zones. The combination of these factors enabled Apple to produce millions of devices in record time and at an exceptionally low cost compared to other companies pursuing the same goal.  

Apple also modified its supplier relationship model from an outsourcing-based model to an increasingly integrated one. A supplier integration example is Foxconn, where Apple employs on-site engineers and shares technical knowledge with suppliers to improve production capabilities and quality, ultimately resulting in one of the most advanced global supply chains. Still, this strategy caused immeasurable long-term impact. By sharing technical expertise with suppliers, Apple inadvertently enhanced their manufacturing capabilities. As evidenced by Apple’s product success, manufacturing scale and high manufacturing quality alone provide a competitive advantage.  

The way Apple integrates supply chains in Asia should be viewed as a highly coordinated production ecosystem rather than an outsourcing model; these various functions (design, engineering and manufacturing) work together in an almost seamless fashion. A significant example of this would be the partnership with Foxconn in China; by 2005, Apple had increased its iPod output from 1 million to 50 million units in 4 years, using large factory complexes in Shenzhen that could assemble hundreds of thousands of workers in a short period of time. Because of this ability to move large quantities of products so quickly, Apple was able to launch its new products globally at a speed no other company could match, thereby turning ideas into consumer products much sooner than competitors. 

Weeks before the launch of the iPhone, Apple‘s screen redesign nearly set back production but also showed the remarkable agility of China’s manufacturing ecosystem. When the new screens arrived at the factory at nearly midnight, 8,000 workers were mobilised from their on-site dorms, assembly lines reconfigured in a matter of minutes, and production resumed within half an hour. Within four days, the factory produced over 10,000 iPhones per day. Another impressive talent pool was the technical talent in China, where Apple estimated it would take 9 months to recruit 8,700 industrial engineers in the U.S., but only 15 days in China. The manufacturing advantage of China has little to do with cheap labour and everything to do with the speed, scale, and level of coordination that still define China’s manufacturing edge. 

A good way to look at this is through Apple’s supplier integration philosophy, which is another great example. When Apple places a purchase order for its products, it’s not simply placing an order and receiving delivery; instead, Apple has engineers working with supplier companies at their facilities to collaborate on developing manufacturing processes together. Over the years, Apple evolved from using a single supplier to having multiple competing suppliers trained to the same process, providing flexibility and reducing risk. BYD is a great example of this: BYD was originally an Apple supplier in its ecosystem, and after acquiring advanced manufacturing capabilities through collaboration with Apple, it eventually became a significant manufacturer of electronics before taking the next step toward becoming a global automotive company through production of electric vehicles.  

Meanwhile, in China, Apple was able to take advantage of the country’s vast pool of highly disciplined labour and a well-developed infrastructure supported by the government. For example, the production of the iPod Classic required several thousand iterations of high-quality polishing processes, yet Apple still managed to meet global demand for iPods. Apple collaborated with a master craftsman in Japan to develop the process, and within a few years, over 20 companies were working together to produce 15,000–20,000 iPod casings daily. 

Overall, Apple’s Asian supply chain has enabled Chinese companies to increase value at the higher end of the manufacturing continuum by establishing Foxconn City (iPod production ramp-up; 400,000 workers), iPhone City (the world’s largest iPhone factory), Apple Garden (Apple-dedicated campus) while adversely affecting Japanese corporations such as  Sony, Panasonic and Sharp, which would become mere subcontractors to the Apple empire. 

Not only are iPhones assembled in China, but their key ingredients, such as chips, batteries, and camera modules, are made in India. Chinese firms such as YMTC (a memory chip maker) and Sunny Optical (a supplier of advanced camera modules) have rapidly moved up the value chain. This evolution has made China indispensable to Apple—not just as a manufacturing base, but as a competitive supplier ecosystem where local firms rival global players, giving Apple greater choice, flexibility, and bargaining power.  Apple’s early bets on making China a manufacturing hub paid off handsomely. 

In 2012, China was at the heart of Apple’s global supply chain for manufacturing, with all of Apple’s supply chain located in China, boasting the majority of its plants in China compared to all other countries combined – over 40% (or 333 supplier facilities) of Apple’s overall supply chain was located in China. However, China’s dominance over Apple suppliers has begun to erode. By the end of 2022, Apple’s total suppliers in China fell to fewer than 30% (276 supplier facilities), marking a clear shift in Apple’s production away from China for the first time in history.  

The tipping point for that shift was the U.S.-China trade war, which began in 2018, prompting many suppliers to rethink their production strategies in light of the new situation. Some Chinese suppliers began operating production facilities outside China, with many of these new facilities located in Vietnam, India, and South Korea. The shift away from China accelerated significantly during the COVID-19 pandemic; in 2021, massive lockdowns in major Chinese cities exposed the significant risk of over-reliance on a single country’s manufacturing for global supply. As a result, by the end of 2022, 17% of Chinese suppliers in Apple’s supply chain had expanded internationally, with Vietnam and India emerging as key alternative production locations. 

Despite some geopolitical challenges and supply chain disruptions, China will remain a manufacturing hub for the tech giant, given its manufacturing capabilities and strength.  

Taiwan’s Semiconductor Supremacy: The TSMC Factor 

While China builds Apple’s devices, Taiwan powers them. As the world’s leading semiconductor foundry, Taiwan Semiconductor Manufacturing Company (TSMC) produces Apple’s custom-designed chips, including the A-series for iPhones and the M-series for Macs.  

The launch of Apple’s A8 chip in 2014 marked the beginning of TSMC’s sustained rise. Since then, Apple’s spending has surged 12x—from $2B to $24B by 2025—making it TSMC’s largest customer, contributing up to 25% of revenue (around 20% in 2025). In addition, Apple has typically led new chip node adoption, accounting for over 50% and nearly 100% of initial production. As a result, over the last few years, Apple has consistently funded TSMC’s learning curve across all major node transitions, starting with 20 nm. 

By partnering with TSMC, Apple has achieved best-in-class performance and power efficiency, differentiating its products from its competitors. Apple’s massive investments in TSMC, apart from the close working relationship between the two companies, have enabled rapid advances in chip technology and early access to the most critical new chips. Apple’s long-term partnership with TSMC has changed the way companies compete, allowing them to shift from using processors from other manufacturers to developing their own silicon portfolio. 

While China lost its share in Apple’s supply chain, Taiwan has remained consistent over the last decade, accounting for approximately 5% of Apple’s worldwide production through the manufacturing of semiconductors and printed circuit boards. Hon Hai Precision Industry (Foxconn), a Taiwanese company, is Apple’s largest supplier and also operates in China and India. 

Korea’s Samsung and LG: Apple’s Core Component Powerhouses 

Despite being direct competitors in the smartphone industry, Samsung leverages its position as a major supplier to Apple to achieve significantly lower component manufacturing costs through mass production. In fact, Apple will be exclusively sourcing foldable smartphone Organic Light-Emitting Diode (OLED) panels from Samsung Display for the next three years, highlighting Samsung’s manufacturing superiority in OLED technology. 

At the same time, Apple has diversified its supply chain by adding LG Innotek as an additional supplier of display components, thereby reducing its reliance on Samsung. LG Innotek operates numerous production facilities in both South Korea and Vietnam. 

Apple’s relationship with Samsung and LG is a classic example of co-opetition—fierce rivals in consumer markets, yet indispensable partners in its global supply chain. 

These nations form part of Apple’s interconnected production system by adding Apple’s perspective value to the overall product. With suppliers clustered in Asia, Apple has an efficient way to reduce overall logistics complexity, lower costs, and improve coordination. Thus, Apple has demonstrated its operational capabilities in coordinating a vast supply chain; however, the overall supply chain is primarily Asian based.  

How India Became Its Next Big Growth Engine 

As Apple completes 50 years, its future is increasingly intertwined with India. What was once a relatively small market for the company is now emerging as both a critical manufacturing hub and a fast-growing revenue driver. Fortune India ranked Apple among the top 10 largest MNCs in India, placing it ahead of behemoths such as Unilever and Amazon, with a total income of ₹81,007 crore. Globally, Apple produces around 220–230 million iPhones annually, making India a core part of its supply chain and a second manufacturing pillar after China.  

India’s iPhone manufacturing journey is nothing short of remarkable – rising from under 1% in 2017, when the first iPhone SE was assembled locally, to 17% in 2025, and reached 25% by year-end. Now, the Cupertino-based tech giant aims to source all U.S.-bound iPhones from India by 2026, accelerating its shift away from China to reduce tariff exposure and geopolitical risks. 

Started operations only a few years back, and now 1 in every 4 iPhones manufactured worldwide is made in India. In the next few years, that will increase to 30% of Apple’s overall production value, given that a plan was in place to move just 10% of production to India. In the last five years, since the introduction of the Production-Linked Incentive (PLI) Scheme in 2020, smartphones have emerged as the largest export product (under the Harmonised System of Nomenclature) in India, leapfrogging from the 115th position in FY 2015, as Apple has exported about $50 billion worth of iPhones and currently accounts for 75% of all smartphones exported from India and 46% of all electronics. Apple’s cumulative iPhone production value over five years is around $70 billion. The PLI scheme has been instrumental in positioning India as Apple’s second-largest production base globally. Apple’s success highlights India’s emerging role in its global supply chain.  

In FY25 (year ended March 2025), Apple India reported revenue of Rs 79,378 crore, up 18% from FY24, and net profit of Rs 3,196 crore, up 16%. IDC report shows Q3 2025 shipments hit a record 5 million units, giving Apple more than 10% market share — a 26% year-on-year (YoY) jump. That quarter made Apple the fourth-largest smartphone brand in India, and it is now a top 5 player. 

India is becoming one of the leading consumption markets. Apple has generated over $9 billion in revenue in India—most of which comes from iPhone sales. In 2025, Apple achieved a record-high 28% share of India’s smartphone market—an increase from 23% in 2024—thanks to strong demand for premium phones. The success of the iPhone 16 series and aggressive financing and trade-in offers have helped the company become the leader in value in 2025. 

While Apple’s total market share in India is 9% in 2025, its share of the high-end smartphone market is significantly higher. In addition to being production centres for iPhones destined for the global market—especially as exports to the US—India continues to provide a strong source of domestic demand for Apple products. The iPhone 16 has emerged as the top-shipped model of the year, marking Apple’s strongest-ever annual performance for an iPhone in India. 

Apple has become one of India’s fastest-growing creators of blue-collar jobs, adding over 250,000 direct roles since the 2021 production-linked incentive (PLI) scheme began. Over 70% of these workers are young women—aged 19 to 24 and first-time job seekers —highlighting a major shift in India’s manufacturing workforce. Not only that, but Apple’s manufacturing ecosystem in India has also been substantial, with 40+ suppliers across 10 states.  

One of the few countries where Apple is developing both manufacturing and consumption scale is India. This shift is a result of a much larger global strategy. The recent disruptions of supply chains, geopolitical issues, and tariff implications have accelerated Apple’s efforts to diversify. With a large pool of available labour, improved infrastructure, and attractive government incentives, India has become one of the most viable production alternatives. 

Fifty years after Apple’s founding, Apple is as much about geographic diversity as it is about continued product innovation and strategic strength. As the company looks ahead, India is set to play a defining role—not just as a market or a manufacturing base, but as a key pillar of Apple’s next phase of growth, and India will be the next China for Apple’s ecosystem.  

Apple’s story is not just about visionary leadership—it is about execution at scale, global collaboration, and supply chain mastery.  

What India Can do to become the Next China? 

The Government of India, under the leadership of Prime Minister Narendra Modi, has invested significantly in the electronics sector over the past decade. Electronics manufacturing in India has expanded significantly over the last 11 years, and now India is the 2nd-largest mobile manufacturer in the world, and Apple’s growth is catalysing India’s broader electronics ecosystem.  

While India currently manufactures as much as 25% of iPhones, the  Domestic Value Addition (DVA) to those products is relatively low at 20%. Additionally, a substantial share of high-value parts is imported rather than manufactured in India. To become more than an assembly operation, India must build additional supplier networks and invest in R&D, semiconductors. If it can make significant strides up the value chain, India could position itself not only as the factory floor for many companies but also on track to become a global leader in innovation and manufacturing.  

If India can make significant progress up the value chain, from semiconductors to chip designing, from assembly to design, from sheer volume to highly creative innovation, the future for India will be more than just an assembler of Apple’s products. 

Launched a few years ago, India’s $21 billion (approximately Rs 175,000 crore) smartphone Production Linked Incentive (PLI) scheme has significantly expanded the country’s electronics manufacturing base, enabling companies like Apple and Samsung to scale production while anchoring the Make in India programme. The PLI scheme played a key role in making India the world’s second-largest mobile phone producer. With the PLI scheme expiring in March 2026, the government is now weighing a successor program that could place greater emphasis on exports and offer targeted incentives to leading manufacturers.