A report published in the Wall Street Journal in May 2022 stated that Apple is looking to boost its production outside China. Citing China’s strict anti-Covid policy, Apple is looking to diversify its production line to countries like India and Vietnam. Taking the opportunity in hand, India launched the Production Linked Incentives Scheme to attract iPhone manufacturers to India. The prompt policy initiative of the government seems to be fructifying now.
Made in India iPhone 14
Deviating from the norms, Apple will start to produce its upcoming iPhones here in India (made in India iPhones).
Apple analyst Ming-Chi Kuo said that the latest survey indicates Foxconn’s iPhone production site in India will ship the new 6.1’’ iPhone 14 almost simultaneously with China for the first time in 2022.
“In the short term, India’s iPhone capacities/shipments still have a considerable gap with China, but it is an important milestone for Apple in building a non-Chinese iPhone production site. It implies that Apple is trying to reduce the geopolitical impacts on supply and sees the Indian market as the next key driver”, he added.
It implies that Apple is trying to reduce the geopolitical impacts on supply and sees the Indian market as the next key growth driver.
The report of Ming-Chi Kuo is in consonance with the earlier report of the Wall Street Journal, which claimed in May this year that Apple wants to diversify its manufacturing line. Over 90% of the Apple products like iPhones, iPads, and MacBooks are manufactured in China. As the escalations between US and China are growing, Apple wants to strengthen its supply chain in the future. Earlier, Reuters had also reported the Coercive action of China on Apple. China in the past had forced Taiwanese-made components of iPhones to be labelled either as ‘Made in Taiwan, China’ or ‘Made in Chinese Taipei’.
India: The Favourable Destination of iPhone Manufacturing
Considering the geopolitical overhaul and authoritarian behaviour of the Communist Government, many companies are shifting their manufacturing base from China. To attract all these companies, India launched a very lucrative Production Linked Incentive scheme. Tax and policy benefits incentivized Apple to establish its base in India.
Taking the benefit, in 2017, Apple’s manufacturers Foxconn and Wistron started manufacturing plants in Tamil Nadu and Karnataka, respectively. Later the third contract manufacturer, Pegatron, also started production in Tamil Nadu.
Reports say, in the first quarter of 2022, Apple shipped about 1 million Made in India iPhones from India with a 50% year-on-year increase. CyberMedia Research (CMR), and market intelligence report say that iPhone sales in India increased by 22% in the first quarter of 2022. Most iPhone variants shipped were iPhone 12 and 13.
Further, Apple is expected to gain a 5.2% market share in India. iPhone 12 with 52% share is the highest selling iPhone followed by iPhone 12 and iPhone 11 with 20% and 18% shares respectively. Apple iPads have also registered a 31% of growth in India with the iPad 9th generation taking 45% of the total share.
Recent reports by the government indicate that India is now the second-largest mobile phone manufacturer in the world. As the companies are moving out of China, India is in the process of capturing the manufacturing market. India’s political, economic, and social stability provide companies with growth. With the added benefits of democracy, India is one of the favourite destinations of multinational companies. Successive economic reform in ease of doing business will make India the top mobile manufacturer. Now, iPhones will not only be assembled but Made in India.
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