Apple is a multinational corporation that produces consumer electronic devices, computers, servers, and software started in 1976. This company also has a chain of Apple stores that sells all Apple products. In the 1990s apple was the leading producer of Personal computers and this dominancy was for more than three decades. In 2001 Apple introduced iPod Music and iTunes 2003. By 2007, Apple established itself as the market leader in Consumer electronics. In today’s time company is known for its iOS devices.
As we all know, apple scheduled the iPhone 14 launch in September, which will be the first iPhone produced in India as well as in China. An Analyst predicted that the Tech Giant Apple would ship iPhone 14 would ship from India instead of China. Ming-chi Kuo said in its tweet that Foxconn’s manufacturing facility in India would begin shipping the all-new 6.1-inch iPhone 14 simultaneously with china in the second half of 2022.
If this happens then it could set a milestone for Apple in producing non-Chinese iPhones. Kuo also said in its tweet that in short term, India’s iPhone shipment capabilities still have a huge gap compared to China. Moreover, he continued that Apple is attempting to reduce the effect of geopolitics on supply and consider the Indian market as the next major potential market for consumer electronic goods.
According to recent reports, this tech giant has sold more than 1.2 million iPhones in India this year. We could find that Apple has made a growth of 94% year on year. Several iPhones sold out of one million were “Make in India”. In addition to this Apple iPad sales increased by 34% year over year selling more than 0.2 units.
China is the most populated country in the world which makes it the potential market for consumer goods. The world considers China the most preferred business destination for all companies who are looking up for abroad expansion. China’s economy has grown tremendously over the past decade. Apart from these good facts Apple company has faced many other problems in doing their business. Here are some of the significant reasons.
Lack of Transparency
In China, Apple along with other companies is still facing problems with unfavorable laws and regulations. Moreover, the laws and regulations are not clear and it is very difficult to access the various state laws. Many companies along with Apple think that they are the target and get unfair treatment.
Intellectual Property is another issue faced by Apple Inc. in China. A Survey conducted by US-China Business Council indicates that most of the goods manufactured are limited to other markets and many other restrictions are imposed on the produced goods.
Many companies feel that the Chinese Government lacks a precise understanding of the significance of trade secrets. Moreover, Deloitte showed that most Chinese companies are always ready to become critical technology-sharing partnership but Chinese Companies fails to honor the partnership agreement once they receive technology. The Chinese government also doesn’t take necessary actions on Chinese companies.
The shortage of skilled laborers is another problem for companies to settle down their business in China. The demand for Professional experts still is the major issue there. Most companies face difficulties in retaining the best staff in their job as other companies give job hikes up to 40%.
Rising Production Cost
The main reason for businesses settling down in China was the cost of land and human resources. However, as of now the demand for land and skilled labor has risen in the majority of cities, as a result, a lot of companies are available for hiring the best talents. To continue their operation the companies have to pay more salaries to the valuable employees. Along with this rising the cost of raw materials and land gave a huge impact on the operations of the companies.
India’s Potential Market
India is one of the biggest potential markets at the current time. With a huge population, India has been among the fastest growing economies in the world over the last decade. The Indian Government made an objective to make India a 5 trillion-dollar economy by 2025. High growth in the economy leads to an impact on the per capita growth of the population and hence this will decrease the purchasing power of the country.