NEW DELHI – Apple assembled more than US$7 billion (S$9.3 billion) worth of iPhones in India in the last fiscal year, tripling production in the world’s fastest-growing smartphone arena after accelerating a move beyond China.
The United States company now makes almost 7 per cent of its iPhones in India through expanding partners from Foxconn Technology Group to Pegatron, people familiar with the matter said. This is a significant leap for India, which accounted for an estimated 1 per cent of the world’s iPhones in 2021.
Apple is exploring ways to reduce its reliance on China as tensions between Washington and Beijing continue to escalate.
Also, as part of this, Apple is in talks with suppliers to make its MacBooks in Thailand, the Nikkei reported on Thursday.
Apple has been mass-producing its Apple Watch in Thailand for more than a year, the report said.
The world’s most valuable company struggled in 2022 with chaos at Foxconn’s main “iPhone City” complex in Zhengzhou, China, which drove home vulnerabilities in Apple’s supply chain and forced it to cut output estimates.
Meanwhile, Indian Prime Minister Narendra Modi has dished out a spate of incentives to boost local manufacturing.
Of the total production, Apple exported US$5 billion worth 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, some time in autumn 2023. If so, that will be the first time that iPhone assembly begins concurrently in the two countries. Also, if the aggressive expansion of its suppliers continues, Apple could assemble a quarter of all its iPhones in India by 2025. Apple’s representatives declined to comment.
Even before last year’s Zhengzhou flare-up, Apple had recognised the need to diversify its supply chain. It successfully lobbied for incentives in India and pushed suppliers Foxconn, Wistron and Pegatron to ramp up locally. The trio, which together employ some 60,000 workers in India, make models ranging from the ageing 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 an alternative location to China. Apple is among the world’s most exacting when it comes to manufacturing: Its production chain encompasses hundreds of companies across the world and employs millions, many of that in 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 when the Chinese economy is sputtering after years of punishing zero-Covid restrictions.
Apple will open its first two retail stores in India next week, one in the financial hub of Mumbai and another in the capital New Delhi. Chief executive Tim Cook is scheduled to fly in to personally inaugurate the two stores, underscoring the domestic market’s rising importance.
Apple has also sought changes in India’s labour laws as part of its effort to expand local production and create mega factories.
Its largest contract manufacturer, Foxconn, plans to invest about US$700 million in a plant in a southern Indian state to make phone components and possibly iPhones. BLOOMBERG, REUTERS
