Apple Inc. assembled more than $7 billion of iPhones in India last fiscal year, news agency Bloomberg reported. Apple’s India output has tripled and the country has become the world's fastest-growing smartphone arena after accelerating a move beyond China.
Citing some sources privy to the development, the news agency said the US firm now makes about 7 per cent of its iPhones in India through expanding partners from Foxconn Technology Group to Pegatron Corp. That’s a significant leap for India, which accounted for an estimated 1 per cent of the world’s iPhones in 2021.
According to the report, Apple is exploring ways to reduce its reliance on China as tensions between Washington and Beijing continue to escalate. Its long-time partners, who make most of the world’s iPhones from sprawling factories in China, have added assembly lines at a rapid pace over the past year, the people said, declining to be named as the information isn’t public.
The world’s most valuable company struggled last year with chaos at Foxconn’s main “iPhone City” complex in Zhengzhou, which drove home vulnerabilities in Apple’s supply chain and forced it to cut output estimates. At the same time, Prime Minister Narendra Modi has dished out a spate of incentives to boost local manufacturing.
Of the total production, Apple exported $5 billion of iPhones in the year ended March 2023, nearly four times as much as the previous period, the people said. Apple will likely try to manufacture the next iPhones in India at the same time as in China, sometime in the fall of 2023. If so, that will be the first time that iPhone assembly begins concurrently in the two countries. And if the aggressive expansion of its suppliers continues, Apple could assemble a quarter of all its iPhones in India by 2025. Representatives for the US firm declined to comment.
Even before last year’s iPhone city flareup, Apple had recognised the need to diversify its supply chain. It successfully lobbied for incentives in India and pushed suppliers Foxconn, Wistron Corp. and Pegatron to ramp up locally. The trio, which together employ some 60,000 workers in India, make models ranging from the aging iPhone 11 to the latest iPhone 14 in the country.
This has helped place Apple at the heart of India’s ambitions to become a major manufacturing hub and alternative location to China. The migration of iPhone production represents an economic triumph for India that could have implications for how other US brands plan their futures. For Apple, the country itself represents a fount of future growth, at a time the Chinese economy is sputtering after years of punishing Covid Zero restrictions.
Apple will open its first two retail stores in India next week, one in the financial hub of Mumbai and another in New Delhi. Tim Cook, CEO, Apple, is scheduled to fly in to personally inaugurate the two stores, underscoring the domestic market’s rising importance.