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Apple’s Ambitious Manufacturing Expansion in India: Scaling to $40Bn

Genre : Business & Economy

On September 26, Apple Inc. unveiled its highly anticipated iPhone 15 series, which includes the iPhone 15, iPhone 15 Plus, iPhone 15 Pro, and iPhone 15 Pro Max, in India and various other countries. This release, however, holds significant importance due to Apple’s groundbreaking decision to make the India-manufactured iPhone 15 models available to customers worldwide on the very same day. This development marks a pivotal moment in Apple’s ongoing commitment to manufacturing in India and its increasing presence in the Indian market.

Apple’s Manufacturing Endeavors in India

Apple India

Apple’s journey in India’s manufacturing landscape has been one of steady and purposeful expansion. Beyond iPhones, the tech giant has ambitious plans to commence the production of AirPods in India starting next year, further underscoring its dedication to the “Make in India” initiative.

Reports from government sources reveal that Apple is poised to undertake a substantial scaling-up of its production activities in India. The company is gearing up to increase its production in India to an impressive $40 billion over the next four to five years, representing a significant leap from its previous milestones. In the last fiscal year, Apple crossed the $7 billion production mark, showcasing its growing manufacturing prowess in the country.

An unnamed government official has shared insights into Apple’s expansive production plans. “Apple has plans to increase production in India to over $40 billion in the next 4-5 years. It has crossed $7 billion in the last fiscal year,” stated the official.

However, it’s important to clarify that while Apple is actively expanding its manufacturing footprint in India, there are currently no immediate plans to commence the production of iPads or laptops within the country. The government official emphasized, “They don’t have any plans to participate in IT hardware PLI (Production-Linked Incentive). They may come at a later stage, but as of now, their focus is to scale up existing production levels.”

Global Debut of India-Built iPhone 15 Models

The release of the iPhone 15 series was a significant milestone for Apple’s manufacturing operations in India. For the first time, the Cupertino-based tech giant launched India-manufactured iPhone 15 models both within the country and on the global sales debut day. This move underscores India’s growing importance as a manufacturing hub for Apple’s products and positions the country as a critical player in the company’s global supply chain.

Impressive Sales Growth and Market Dominance

Initial reports indicate that the sales of Apple’s iPhone 15 series witnessed remarkable growth compared to the previous iPhone 14 series on the launch day. This robust market performance is a testament to Apple’s product appeal and growing brand presence in India.

Additionally, Apple has demonstrated its formidable market position in India, now ranking among the top five markets for the company. Market research firm Counterpoint Research revealed that Apple commands a commanding 59 percent market share in the ultra-premium smartphone segment, encompassing phones priced above Rs 45,000 apiece, for the first quarter of 2023. This data highlights Apple’s dominance in India’s premium smartphone market, a position it has meticulously cultivated over the years.

Surpassing Samsung in Smartphone Export Volumes

In a noteworthy development, Apple has surpassed its South Korean rival, Samsung, in terms of smartphone export volumes from India. Recent reports indicate that Apple accounted for 49 percent of the total 12 million smartphone shipments in India during the June quarter, outpacing Samsung’s 45 percent share. This shift in shipping volumes underscores Apple’s rapid expansion of local manufacturing capabilities in India.

Furthermore, data from the industry showcases Apple’s impressive growth in export volumes over the past year. Its share of exports surged from a mere 9 percent of the approximately 8 million smartphones shipped in Q2 2022 to nearly half of the total smartphone exports in Q2 2023. Notably, India’s smartphone exports reached around 13 million units in the first quarter of this year, followed by 12 million in Q2 2023. Comparatively, exports stood at 10 million smartphones in Q1 2022 and 8 million in Q2 2022.

Conversely, Samsung’s share of export volumes declined from 50 percent in Q1 2023 to 45 percent in Q2 2023. This reduction is a matter of concern for Samsung, as the company had historically dominated the export market from India.

The Role of Foxconn in Apple’s Manufacturing

Apple’s remarkable performance in India’s manufacturing sector can be attributed to the concerted efforts of its contract manufacturers, including Foxconn, in particular. Foxconn, a global leader in electronic manufacturing services, has played a pivotal role in Apple’s production activities in India.
The involvement of Foxconn underscores the scale and sophistication of Apple’s manufacturing operations. With a vast network of facilities and a strong commitment to quality, Foxconn has been a key partner in Apple’s efforts to meet the growing demand for its products in India and around the world.

Government Initiatives and India’s Growing Relevance

Apple’s impressive performance in India’s manufacturing landscape has been facilitated by government initiatives, including the Production-Linked Incentive (PLI) scheme for smartphone manufacturing. This initiative has incentivized major players like Apple to ramp up their manufacturing activities in the country.

The increasing reliance on India as a manufacturing hub aligns with the government’s vision to bolster domestic production and create job opportunities. India’s growing significance to Apple’s global supply chain suggests a strong commitment to fostering mutually beneficial ties between the tech giant and the Indian government.

Conclusion

Apple’s strategic commitment to expanding its manufacturing operations in India is poised to reshape the country’s technology landscape significantly. The recent launch of the iPhone 15 series, featuring India-built models available globally on the debut day, underscores Apple’s growing reliance on Indian manufacturing capabilities. With plans to scale production to an impressive $40 billion over the next few years and the increasing dominance of its products in the Indian market, Apple’s journey in India is one to watch closely.

This expansion not only positions India as a vital manufacturing hub for Apple but also strengthens the bilateral ties between the tech giant and the Indian government, paving the way for further collaborations and economic growth in the country. As Apple continues to invest in India’s manufacturing ecosystem, it not only serves its business interests but also contributes to India’s emergence as a global manufacturing powerhouse.

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Indrajeet Singh
Indrajeet Singh
The mastermind behind IQuanta, Indrajeet Singh is an expert in Quant and has devised some ingenious formulae and shortcuts to significantly cut down on the time taken to solve a problem

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