As the world enters into 2022 from a turbulent 2021, there are a number of annual rituals that we are going through like a ton of New Year resolutions that will end up getting broken in a week or two, and totally forgotten in about a month. There is another ritual- the wait for the latest offering from Apple, an iPhone to be precise. All iPhone lovers are waiting for iPhone 14 which will hit the markets later this year.
Your new iPhone will be special. Speculation is that it will come in a notch-less design with a punch-hole camera, an under-display fingerprint scanner, no camera bump and a titanium alloy body. Sounds cool, right? Well, it only gets better because your new iPhone might be a ‘made in India’ iPhone. The Indian government is making a huge push towards manufacturing high-end “Apple” products indigenously.
India’s plan to manufacture “Apple” products indigenously
As a part of its flagship ‘Make in India’ scheme, the Modi government has proposed that Apple generates annual production output worth $50 billion in India over a period of the next five-six years. Currently, only the iPhone is made in India and the latest iPhone 13 too is not produced in the country.
But India wants it all. It wants Macbooks, iPads, air pods and watches to be produced in India as well. India wants to emerge as a favoured destination for the manufacturing of Apple products. At a key meeting between top government officials and senior functionaries from Apple, it was made clear that New Delhi wants the Tim Cook-led company to develop India as a top global sourcing hub for exporting fully-built products across the world.
TOI quoted a source as saying, “The meeting with the Apple officials happened recently, where senior members of the government – including a top minister – were present.”
India leveraging its huge market advantage
India is using its leverage as the world’s second-largest smartphone market, with a rising economy and increasing consumer demand for high-end tech products, to get Apple to develop India as a global sourcing hub.
Apple had shipped over 1.53 million iPhone units to India in the July-September period (Q3) in India. However, Apple’s performance isn’t all that great in India. In 2020, 150 million smartphones were sold in the country and as per Counterpoint Research’s report, Apple sold 3.2 million iPhone units in India. So what is iPhone’s share in India’s smartphone market is nearly 2.1 percent.
Apple would certainly want to expand its market share in India. Now, if it starts making in India- it can as well claim that it is helping India get rich. People of India have a tendency to reward companies and brands that play a role in the country’s glorious growth story. Take for example, Tata and Maruti Suzuki. These brands have enjoyed love and growth in India because of their Indian identity and indigenous production of goods.
India eating into China’s “Apple”
India is looking to steal Apple from China. The Indian government officials were reportedly clear about the fact that they want India to be Apple’s global sourcing hub, a role that is being currently played by China.
Presently, China occupies the majority of Apple’s production and an estimated 95 percent of the Apple products that the world uses were manufactured in the Communist nation. The Taiwanese trio of Foxconn, Wistron and Pegatron that function as Apple’s production partners have set up a base in India. However, what they produce for Apple in India is ‘near-negligible’ when compared to their manufacturing volumes in China.
However, India firmly believes that it can replace China as the top destination for the manufacturing of Apple goods. Apple has already experienced the difficulties attached to making products in China. Last year, China was hit by deficient power production and outages in key industrial centres of the country. This had led to key Apple suppliers temporarily halting production.
Moreover, China has become prone to repeated COVID-19 outbreaks, and jamming of key ports and transit hubs. So, you can no longer base your supply chains on China because you never know when your arrangement may get disrupted. Add to it a Chinese President, who remains wary of tech giants and keeps introducing tight regulatory measures to make their life hard.
On the other hand, India offers a rising economy and a welcoming regulatory system for tech companies. The source quoted by TOI added, “The enabling environment includes production-linked incentive (PLI) schemes to encourage companies to invest in and grow, manufacturing in India. Also, capital subsidy plans are being given out, such as the one allotted for kickstarting semiconductor manufacturing where the government has extended support of $10 billion for those willing to invest.”
So, India is all set to steal Apple from China, and it won’t be a surprise if our next iPhones and Macbooks are made in India.