Apple’s recent shifting of production from China to India, seem to be bringing a significant change in its supply chain, and in record time at that. According to a new report by Bloomberg, the Cupertino-headquartered tech titan assembled a staggering $14Bn worth of iPhones in India during the past fiscal year. This translates to roughly 14% of Apple’s global iPhone production, or approximately one in seven iPhones being manufactured in the South Asian nation.
Several factors have contributed to Apple’s decision to ramp up iPhone production in India. The ongoing geopolitical tensions between the US and China, a major source of friction for many American companies, is a key driver. The 2022 incident at a major Chinese iPhone factory, where a worker revolt resulted in significant financial losses for Apple (estimated at $1 billion per week), further highlighted the vulnerability of relying solely on Chinese manufacturing, which enabled Apple to turn to newer areas for production. India was one of the key areas to emerge.
Beyond these concerns, Apple is also looking towards long-term strategic advantages by being a more present manufacturing player in India. India’s “Make in India” initiative, offering financial incentives and a supportive regulatory environment, has proven attractive to foreign companies like Apple. India’s vast pool of skilled labor and its rapidly growing domestic smartphone market present an enticing opportunity for both production and potential customer base expansion. Despite its efforts, however, Apple currently holds a relatively modest 6.4% share (marking an annual increase of 38.6%) of the Indian smartphone market, which continues to be dominated by budget-friendly Chinese brands. Still, Apple is working to increase its market share, and the company opened its first two retail stores in New Delhi and Mumbai last year, with plans for three more by 2027.
The production of Apple’s iPhones in India is not a solo act. The company currently relies on established contract manufacturers to handle the assembly process. Foxconn Technology Group, a Taiwanese giant with extensive experience in iPhone manufacturing, remains the dominant player (and one of Apple’s key suppliers) in India. They currently assemble nearly 67% of the iPhones produced there. Pegatron Corp., another Taiwanese manufacturer, is also a significant contributor, churning out approximately 17% of India-made iPhones. Similarly, Tata Group acquired the Wistron Corp. facility in southern India last year, further bolstering India’s domestic manufacturing capabilities. Reports suggest that Pegatron is in advanced talks to transfer control of their sole iPhone manufacturing plant in India to the Tata Group as well.
Currently, the focus of iPhone production in India lies primarily on mid-range models. This includes the iPhone 12, the base model iPhone 15, and potentially some mid-tier variations of other models. The premium iPhone 15 Pro and Pro Max models are still manufactured exclusively in China. Despite the current focus on mid-range models, the surge in iPhone production in India is expected to have a significant impact on the country’s exports. The Indian Cellular and Electronics Association predicts that mobile phone exports, driven largely by Apple and Samsung, will exceed ₹1.2 trillion by the end of the current financial year.
