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    Home » Electronics and hardware » India is fast emerging as an iPhone manufacturing powerhouse

    India is fast emerging as an iPhone manufacturing powerhouse

    Apple exported more than $2.5-billion worth of iPhones from India from April to December, nearly twice the previous fiscal year’s total.
    By Agency Staff9 January 2023
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    Apple exported more than US$2.5-billion worth of iPhones from India from April to December, nearly twice the previous fiscal year’s total, underscoring how the US tech giant is accelerating a shift from China with geopolitical tensions on the rise.

    Foxconn Technology Group and Wistron have each shipped more than $1-billion of Apple’s marquee devices abroad in the first nine months of the fiscal year ending March 2023, people familiar with the matter said. Pegatron, another major contract manufacturer for Apple, is on track to move about $500-million of the gadgets overseas by the end of January, the people said, asking not to be identified revealing private information.

    Apple’s rapidly growing export numbers illustrate how it is ramping up operations outside of China, where chaos at Foxconn’s main plant in Zhengzhou exposed vulnerabilities in the Cupertino-headquartered company’s supply chain and forced it to trim output estimates. That compounded a broader problem with evaporating demand for electronics as consumers weigh the risks of a global recession.

    Apple, the world’s most valuable company, began assembling its latest iPhone models in India only last year

    Apple, the world’s most valuable company, began assembling its latest iPhone models in India only last year, a significant break from its practice of reserving much of that for giant Chinese factories run by its main Taiwanese assemblers including Foxconn.

    While India makes up just a fraction of iPhone output, rising exports bode well for Prime Minister Narendra Modi’s plan to make the country an alternative to China as factory to the world.

    China’s Covid Zero policies and an episode of violence at the Zhengzhou plant — nicknamed iPhone City as the world’s biggest production centre for the device — laid bare the dangers of relying on the country. While Beijing has since dropped that approach to containing the virus, Apple and other global names are exploring alternative locations more than ever before.

    India’s vast workforce, Modi’s support and a thriving local market make it a prime candidate to take on more electronics manufacturing. Foxconn, Apple’s largest supplier, began building facilities in the country more than five years ago in anticipation of a need to extend its geographic range.

    Incentives

    One recent selling point is a raft of new government incentives, a cornerstone of Modi’s drive to make India an electronics manufacturing hub. Foxconn has won $44-million of benefits in the first year of the so-called production-linked incentives scheme, while Wistron’s claims are currently being processed, the people said.

    Representatives for Apple, Foxconn and Wistron didn’t respond to e-mails seeking comment. A Pegatron spokesman declined to comment.

    Apple’s contract manufacturers currently make iPhones at plants in southern India. But production in the country is just beginning. About three million of the devices were made in India in 2021, compared to 230 million in China, according to Bloomberg Intelligence estimates.

    Foxconn began making the iPhone 14 in India a few months ago — sooner than anticipated — after a surprisingly smooth production roll-out that slashed the lag between Chinese and Indian output from months to mere weeks. Apple’s three Taiwanese partners currently assemble iPhones 11 to 14 in India.

    Indian Prime Minister Narendra Modi

    But moving out of China, where Apple has built a deep supply chain for close to two decades, isn’t easy. A Bloomberg Intelligence analysis estimated it would take about eight years to move just 10% of Apple’s production capacity out of China, where roughly 98% of the company’s iPhones are being made.

    India tracks production and exports of all smartphone makers who enjoy financial incentives as part of Modi’s push.

    Beyond smartphones, the country is drawing up plans to boost financial incentives for tablet and laptop makers, hoping to woo Apple to make everything from earphones to MacBooks locally as well as attract other brands. The iPhone maker is also expected to open its first retail store in India in 2023, after meeting certain criteria imposed on foreign retailers.  — Sankalp Phartiyal, with Debby Wu, (c) 2023 Bloomberg LP



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