Apple iPhone Exports From India Doubled Between April and August This Year
Apple has been increasing its iPhone output in India, part of Prime Minister Narendra Modi’s push to make the country a manufacturing hub for global electronics companies. The rise in iPhone exports is a positive sign for India’s economy.
Currently, three of Apple’s Taiwanese contract manufacturers assemble iPhones in India: Foxconn, Wistron and Pegatron. Here we will discuss about rajkotupdates.news:apple-iphone-exports-from-india-doubled-between-april-and-august.
1. Exports Doubled Between April and August
As the Indian government’s production-linked incentive scheme (PLI) continues to boost local smartphone manufacturing, Apple iPhone exports from India doubled between April and August this year. This is a significant development for the Indian economy, as it bolsters the Make in India initiative and encourages other companies to invest in local manufacturing.
Since April, iPhone assemblers Foxconn Technology Group, Wistron Corporation and Pegatron Corporation have shipped a total of $1 billion in iPhones abroad. This is nearly twice the amount of iPhones they shipped in the previous fiscal year.
This growth is a sign that India is becoming a manufacturing hub for Apple, allowing the company to diversify its supply chain. It also allows the company to reduce its reliance on China, where Covid lockdowns and other disruptions have forced it to seek alternative options for iPhone production.
Despite this increase in exports, India still produces only a fraction of the iPhones that are produced in China. This is because most of the iPhones that are currently being produced in China are assembled by Apple’s main Taiwanese contract manufacturers, Foxconn Technology Group and Wistron Corporation.
However, these companies have started shifting a portion of their iPhone manufacturing to India in 2022 as part of the company’s aggressive strategy to diversify its supply chain amid geopolitical tensions and Covid lockdowns. This move is part of Prime Minister Narendra Modi’s push to make India a manufacturing hub for the world and attract foreign investment, which aligns with the increasing global demand for electronics.
According to Bloomberg News, outbound shipments of India-made iPhones, primarily to Europe and the Middle East, are set to reach $2.5 billion in the 12 months through March 2023. This is almost double the $1.3 billion in outbound shipments the country exported in the year through March 2022.
While the increased exports from India are an impressive development for the Indian economy, they aren’t without their downsides. For one, it’s difficult for Indian consumers to find authorized stores to purchase their iPhones, which means that many of them must buy their devices through unofficial channels. Additionally, iPhone assemblers in India aren’t yet fully stocked, so it’s difficult for them to meet the demand.
2. India Becomes a Manufacturing Hub for Apple
The US tech giant is gradually shifting more iPhone production from China to India. The move comes after growing geopolitical tensions between the US and China have led Apple to rethink its supply chain strategy. Its contract manufacturers, Foxconn, Wistron and Pegatron, have also been pushed to boost local production by the Indian government’s production linked incentive (PLI) scheme.
Analysts predict that Apple will ship around 25% of its iPhones from India by 2025, according to a JP Morgan report published last month. This would make it the second largest exporter of smartphones after China.
However, this will not be a seamless process. It will take years for the country to build a high-quality electronics manufacturing ecosystem, experts told CNN. For starters, it will have to overcome the challenges of accessing land and sourcing components locally. It will also need to attract companies to set up operations in India and offer subsidies to lure them there.
It will also have to compete with Samsung, which is based in the Shenzhen manufacturing hub of China. While China has a low cost of labour, its complex system of castes means that it will not be easy for India to replicate the same model, analysts explained.
This is why the Indian government has made it a priority to attract foreign investments and develop top-notch factories. The government offers incentives for foreign companies to build local manufacturing infrastructure and R&D facilities, and it also aims to boost the export of Indian-made products.
The latest round of iPhone manufacturing in India came with the launch of the new iPhone 14 and iPhone 14 Plus models, which were manufactured by Apple’s three contract manufacturers — Foxconn, Wistron and Pegatron. The company started assembling these models in India two months after they were launched in China, narrowing the six-month assembly gap between the two countries.
While this is an excellent start for India, it will not be enough to become a major manufacturing hub for Apple. The country will have to overcome the challenges of accessing real estate and sourcing components locally, as well as attracting companies in its supply chain to set up operations there.
3. India-Made iPhones Will Hit $3B in Apple’s Fiscal Year
Apple’s exports of iPhones from India doubled between April and December last year, according to Bloomberg. That reflects how the US tech giant is shifting a significant portion of its manufacturing from China, where it relies on Taiwanese companies for most of its phones.
Analysts say the move is part of a larger plan to make India a more important manufacturing hub for Apple. As of now, about 5 percent of the iPhones Apple makes are made in India. However, a recent report suggests that Apple could see its share grow to 25 percent by 2025.
One of the reasons why Apple is expanding production in India is that it’s a more cost-effective option for producing its iPhone models, especially the newer ones. The company’s contract manufacturers, Foxconn, Wistron and Pegatron, pay a lower price for the parts they need to assemble the iPhone in India than they would if they were manufacturing the iPhone in China, according to a report from market research firm Counterpoint.
That lower price is due to the fact that the components used to assemble the phone in India are typically cheaper than the components in China, which helps reduce the cost of the smartphone. But the high import duties on the iPhone in India, combined with other taxes, means that the phones are still quite expensive in the country compared to other markets.
In addition, the high costs of assembling in India also limit Apple’s ability to compete with lower-cost Chinese rivals. As a result, despite its efforts to boost sales in India, Apple has a small 3.8% market share there, compared to its competitors such as Samsung and Xiaomi.
While some analysts think that Apple could have been more aggressive about increasing its presence in India, it’s not clear how much it will be able to do. Ultimately, the only way that India can be a viable production hub for Apple is to invest heavily in infrastructure and make it more attractive for companies in its supply chain to set up shop there. This will require a lot of work, according to analysts at Counterpoint Research.
4. India-Made iPhones Are a Drop in the Ocean Compared to Chinese-Made iPhones
While Apple has made an effort to shift some of its iPhone manufacturing to countries outside of China, it is still a long way from shifting the bulk of the iPhone production out of that country. It would take about eight years to shift 10% of the iPhone production out of China, according to Bloomberg Intelligence.
Assembling iPhones requires coordination between hundreds of suppliers and meeting Apple’s infamously strict deadlines and quality controls. In India, Foxconn and Wistron, two contract manufacturers that make the devices, struggle to meet those demands. Workers have protested over wages and food in two recent incidents, and the country’s factories aren’t quite ready to adopt the highly controlled practices that Apple needs for its iPhone production.
Nonetheless, the government has been working hard to promote local smartphone manufacturing, and incentives worth billions of dollars are attracting Apple’s manufacturing partners to relocate their operations. These incentives have helped India’s economy grow and reduce its reliance on China for the supply of smartphones.
Even with these incentives, India-made iPhones will likely remain far more expensive than Chinese-made iPhones. This is because most of the components required to build an iPhone are sourced from other countries, and these costs will need to be added to the total cost of the phone. In addition, Apple will be paying import taxes and other expenses.
However, India is a growing market for the company, and this increase in production capacity should help it further build traction there. Analysts believe that Apple has a good chance of moving more than 5% of the company’s iPhone production to India this year, and they expect it to reach 25% by 2025.
While this is an exciting development for the Indian economy, and it marks a step forward in India’s efforts to become a global manufacturing hub for the technology industry, it won’t make a dent in Chinese demand. The reason is that India has a relatively smaller population, and the percentage of its population that can afford an iPhone is far lower than the percentage of the population in developed countries like the US or Europe. To know more about rajkotupdates.news:apple-iphone-exports-from-india-doubled-between-april-and-august just click on below link:
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