SUMMARY
Apple started manufacturing in India in 2017 with the iPhone SE
With the latest announcement, Apple will be manufacturing iPhone 11, 12, and 13 in India
The Silicon Valley giant has been told to ramp up manufacturing to the tune of $5 Bn
Apple has started the production of its latest phone, the iPhone 13, in India, at the Chennai plant of its manufacturing partner Foxconn.
The company will look to deepen its presence in India, which happens to be the world’s second-largest smartphone market behind China and to grow its market share in India.
In a statement given to ET, the Silicon Valley giant said, “We are excited to begin making iPhone 13… right here in India for our local customers.”
With the fresh announcement, the company is now manufacturing all of its latest models in India, with two of its manufacturing partners, Foxconn and Wistron. Along with the two, Pegatron, the third Indian manufacturer of iPhones, will start manufacturing iPhone 12 in India.
As per CyberMedia Research (CMR) estimates, one in every eight smartphones shipped in India in 2021 was a premium smartphone.
Prabhu Ram, head of the industry intelligence group at CyberMedia Research, said, “With the production of its latest flagship iPhone 13 in India, Apple will be able to cut its time to market, while having better control of its supply chain dynamics. In doing so, it will be able to meet the strong consumer demand for the latest iPhone.”
He added, “Apple’s expanded iPhone production capabilities and aggressive retail initiatives have contributed to its aggressive growth in the premium smartphone segment. As Apple further diversifies its manufacturing base and expands its retail footprint with Apple-owned and Apple-operated flagship retail stores, Apple will further build on its strong growth momentum in India.”
This comes months after officials of the Indian government reportedly asked the Cupertino-based tech giant to generate an annual production output worth $5 Bn in the next five to six years.
In the last year, Apple registered revenue of $365.8 Bn, with $191.9 Bn of that coming from iPhone sales alone. Sales of the iPad ($31.8 Bn), wearable, home and accessory devices ($38.3 Bn in 2019), and Mac devices ($35.1 Bn in 2019) also contributed to its bottom line.
Made-in-India iPhones make up about 70% of the company’s mobile phone sales in the country, in part due to the government’s Production-linked incentive scheme (PLI). The PLI scheme for large scale electronic manufacturing gives a financial incentive for the domestic manufacturing of mobile phones, electronics components and advanced therapy medicinal products (ATMPs).
The government plans to give incentives of up to INR 40,951 Cr over a period of five years. But even this 70% coming from Foxconn and Wistron does not hold a candle to the production that happens in China.
However, after reports of dissent across its manufacturing plants, Apple had announced a $50 Mn Supplier Employee Development Fund for upskilling and training workers throughout its supply chain services.
The company said that the fund will be used to provide learning opportunities and develop skills among employees of its manufacturing partners. Along with the workers in the manufacturing divisions in the US, China and Vietnam, India will be among the first countries to benefit from the $50 Mn fund.
The company has partnered with the likes of the International Labour Organisation (ILO), the International Organisation for Migration (IOM), and global education experts for the learning programs.
Apple started manufacturing in India in 2017, with the iPhone SE. Now, the company is manufacturing the iPhones 11 through 13 in India, though none of the Pro variants is being manufactured in the country as of now.
