According to J.P. Morgan analysts, Apple Inc. may manufacture one out of every four iPhones in India by 2025. According to Reuters, Apple is considering shifting more iPhone production to India as geopolitical tensions rise and China imposes strict COVID-19 lockdowns.
According to J.P. Morgan analysts led by Gokul Hariharan, “Taiwanese vendors such as Hon Hai and Pegatron play a key role in the relocation to India. In the medium to long term, we also expect Apple to qualify local India manufacturing suppliers.”
India world’s second-biggest smartphone market
J.P. Morgan noted that the Cupertino, California-based company is expected to move around 5% of iPhone 14 production to India by late 2022. It is prudent to mention that India is the world’s second-biggest smartphone market.
The production shift is not going to be limited to iPhones only, according to the Reuters report. Around 25% of all Apple products, including Mac, iPad, Apple Watch and AirPods are expected to be manufactured outside China by 2025 as well. Currently, only 5% of other Apple products are made outside China.
According to recent media reports, India may account for at least 12% of the free-on-board (FOB) value of Apple iPhones manufactured by its vendors worldwide. The ratio is based on information provided to the Indian government by Wistron, Foxconn, and Pegatron.
In 2017, Apple began producing the iPhone in India through Wistron and Foxconn. New Delhi has been bullish on domestic manufacturing, and the tech giant’s move is consistent with the country’s manufacturing outlook.
India manufacturing iPhone 13
Surprisingly, the Cupertino-based giant has already outsourced a significant portion of its manufacturing to India. Apple has been producing the iPhone 13 in India, with plans to produce the iPhone 14 in the near future.
Wistron, another Apple supplier, is reportedly in talks with the Indian conglomerate Tata Sons to establish a joint venture to manufacture iPhones in India. The Indian government asked the tech giant in 2021 to produce products worth $5 billion per year for the next five years.
As a result, Apple has set a production target of INR 47,000 Cr (approximately $615 Mn) in India for the current fiscal year. Apple will also benefit from the production-linked incentive (PLI) programme for electronics manufacturing.
With the pandemic disrupting supply chains, there is pressure for companies with a large dependence on China to move elsewhere. Companies such as Google are also looking at India as a lucrative manufacturing hub.
