When Apple's fiscal year finished in September 2022, the company had manufactured $205 billion worth of devices. While mainland China contributed 95.8% of global exports in 2021 and 98.2% in 2020, Counterpoint Research predicts that this share would decline to 91.2–93.5% in 2022.
Because of Apple's efforts to diversify its manufacturing facilities away from China, India is poised to become a key centre for iPhone manufacture. According to executives and experts in the industry, the value of iPhones manufactured domestically will increase from its current 5% to over 20% in the next three to four years.
Industry executives and experts predict that Apple's contract manufacturers in India—Foxconn, Pegatron, and Wistron—will significantly increase output and, in turn, exports thanks to the Indian government's 41,000-crore production linked incentive (PLI) plan.
Amidst geopolitical tensions between China and the US, Apple has been slowly working towards transferring a greater share of iPhone manufacture to India. After Covid-induced lockdowns interrupted production at Foxconn plants in China, the business reportedly expedited its preparations to move out of the country.
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The Foxconn facility in Zhengzhou, China, is the biggest iPhone assembly factory in the world.
Foxconn will speed up the development of its capacity at its India facility, according to a tweet by respected Apple analyst Ming-Chi Kuo last month. Kuo predicts that by 2023, the number of iPhones assembled by Foxconn in India will have increased by at least 150% annually, and that by 2023, 40-45% of iPhones would have been shipped from India, up from the current 2-4%. The media had already publicised Kuo's predictions on November 5.
Two experts in the field have remarked that this estimate is unrealistic and that a more accurate number would be closer to 20%. "It's a work in progress," one of the individuals remarked of the transition from China to India. Attempting to lessen its reliance on China, Apple is reportedly planning to move 25% of iPhone manufacture to India by 2025. This news was first reported by JP Morgan on September 21, 2022.
"Attracting electronics manufacturing GVCs is more of a function of initiatives like PLI than of just favourable geopolitical conditions. The key to our success is maintaining a competitive business climate, including low tariffs, a willingness to construct large-scale factories, and accompanying labour reforms, and a constant focus on keeping investor sentiment high "Pankaj Mohindroo, head of the Indian Consumer Electronics Association (ICEA), made this statement. He said, "It's a long road." Apple has opted to join ICEA.
When Apple's fiscal year finished in September 2022, the company had manufactured $205 billion worth of devices. While mainland China contributed 95.8% of global exports in 2021 and 98.2% in 2020, Counterpoint Research predicts that this share would decline to 91.2–93.5% in 2022. When it comes to sales of iPhones, China is still second only to the United States.
India introduced its PLI programme a few years ago, at a time of heightened US-China tensions and when many multinational corporations, including Apple, were searching for an alternative to China. The three major New York contract manufacturers were granted subsidies under this programme.
Since then, Apple has been giving more attention to the Indian market. Ten days after the iPhone 14's worldwide release, production at Foxconn's facility in Tamil Nadu began. Pegatron also produces cutting-edge gadgets at its factory in Tamil Nadu.
iPhone SE, iPhone 12, iPhone 13, and iPhone 14 (base) are currently manufactured by Apple in India. But the Pro models that are available in the country are all imported.
Analysts and executives say that fixing the delay in Apple's Pro model production in China should be the company's top priority.
An associate vice president at IDC India named Navkendar Singh recently stated that there is a strong possibility that Apple will begin assembling the Pro models in India, of which 85% are currently made in China. Apple wasn't releasing a Pro model of the iPhone before now because there wasn't much of a demand for it in the local market. However, the tides are turning on this situation.
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