Apple has increased the shipment volumes and value of iPhones made in India, as it tries to diversify its supply chain away from China. Market research firm Counterpoint reported a 65 percent increase in the shipment volumes of iPhones made in India year-on-year, while the value of iPhones surged 162 percent. This development indicates that India is fast becoming a crucial part of Apple’s plans to shift its manufacturing supply chain outside China.
Significance of India for Apple
India is reportedly emerging as a vital market for Apple, with the tech giant accounting for 25 percent of the value of India’s total smartphone shipments last year. The report indicates a rise from 12 percent in 2021. India launched a plan in 2020 that offered incentives to global smartphone makers for shifting their production to India, and Apple has been one of the beneficiaries. In January, Taiwan’s Digitimes Research forecast that India would assemble up to 50 percent of Apple’s iPhones by 2027, a significant increase from fewer than 5 percent at present.
Concerns in China
The news of Apple’s plan to increase its manufacturing of iPhones in India has raised concerns among social media users in China. Many believe that the move undermines China’s primary role in Apple’s manufacturing supply chain. According to the South China Morning Post report, China currently manufactures up to 85 percent of iPhones worldwide. However, Beijing risks losing its dominance as Apple looks for ways to shift its manufacturing supply chain outside China.
Apple’s Measures to Reduce Reliance on China
The report suggests that Apple is one of the global tech brands that are seeking to reduce their reliance on China for production due to rising tensions between Beijing and Washington and production disruptions in China due to the Chinese government’s stringent COVID-19 measures. Apple is, therefore, diversifying its supply chain by investing in countries like India, which offers incentives to smartphone manufacturers for shifting their production to the country.
Investment by Apple Contract Manufacturer Foxconn
Foxconn Technology is reportedly planning to invest around USD 700 million in a new plant in India, aimed at enhancing local production. The move comes hot on the heels of Foxconn’s announcement of a major investment in Karnataka, which will generate over one lakh jobs, according to an official statement issued on March 5. Young Liu, the Chairman of Hon Hai Technology (Foxconn), recently visited India, where he met with Prime Minister Narendra Modi to discuss ways of enhancing India’s tech and innovation ecosystem. During his visit, Liu updated the PM on Foxconn’s progress in India and the company’s plans for building an ecosystem in India that will allow all its stakeholders to share, collaborate and thrive.
Future of Smartphone Production in India
With India expected to assemble up to 50 percent of Apple’s iPhones by 2027, the country’s growth potential is significant. The move will put India on par with the scale of production in mainland China, and Foxconn’s investment in a new plant in India is a significant indication of this trend. As the tech industry continues to seek production opportunities outside China, India is fast becoming a key player in the smartphone manufacturing space.
