SUMMARY
Foxconn, Wistron, and Pegatron have committed to manufacture iPhones in India with a total FOB value of at least $15 Bn by FY26
Apple has repeatedly stated its intent to ‘diversify’ its supply chain amid increasing geopolitical tensions between China and the US
The Cupertino-based tech giant will also start manufacturing iPhone 14 in India starting October 2022, with iPhone 13 production starting back in April
According to numbers submitted to the government by Foxconn, Wistron and Pegatron, India might account for at least 12% of the free-on-board (FOB) value of Apple iPhones manufactured by its vendors worldwide.
Per a Business Standard report citing sources, the total value of iPhones sold worldwide can reach $250 Bn in FY26. Therefore, the total FOB of iPhones made in India would be around 12% of the global FOB.
The three iPhone makers active in India have committed to manufacture iPhones in India with a total FOB value of at least $15 Bn by FY26. The manufacturing will be eligible for incentives under the production-linked incentive (PLI) scheme for large-scale electronics manufacturing, which includes smartphones.
The development comes after it was widely reported that salt-to-software conglomerate Tata Sons is in talks with Wistron to establish iPhone manufacturing in India. The Indian conglomerate is looking to create a joint venture with Taiwan-based Wistron to start manufacturing.
Apple has repeatedly stated its intent to ‘diversify’ its supply chain amid increasing geopolitical tensions between China and the US. With the situation around Taiwan also escalating, if a conflict breaks out in the South China Sea, Apple’s supply chain can come to a halt immediately.
The situation is further exacerbated by China’s frequent and extended COVID-19 lockdowns in major cities such as Shanghai. Hence, India has emerged as a solid alternative to China in terms of manufacturing.
Media reports also emerged yesterday suggesting that the Cupertino-based tech giant will also start manufacturing iPhone 14 in India starting October 2022. It started manufacturing iPhone 13 back in April at Foxconn’s Chennai plant. Several tech analysts anticipate that Apple will manufacture around 11-12 Mn iPhone 14 in the country via the three manufacturers active in India.
Apple’s commitment to manufacturing in India was made clearer when it included the country among the first beneficiaries of its $50 Mn Supply Chain Workers Upskilling Fund.
At the same time, Apple’s revenue in India has been steadily growing as the demand for iPhones and other products increases.
Per a CyberMedia Research report, Apple sold around 1.2 Mn iPhones in Q2 2022 in India, up 94% year-on-year (YoY). Further, per Counterpoint research, laptop and PC shipments to Indian businesses increased by 50% YoY in the first half of 2022.
For the quarter that ended June 30, 2022, the tech giant reported that it almost doubled its revenue in India compared to the corresponding quarter a year earlier.
