Apple (AAPL) at the moment (Sept. 9) revealed its newest iPhone 16 lineup, together with the brand new Apple Watch and AirPods, all accessible on Sept. 20. This would be the first time Apple manufactures the iPhone Professional fashions in India, because the Cupertino, Calif.-based tech behemoth continues shifting its provide chain away from China. It additionally marks a milestone for the Indian authorities, which goals to determine the South Asian nation as a worldwide hub of shopper electronics manufacturing.
Apple first started assembling iPhones in India in 2017, making the iPhone SE and outdated iPhone fashions, in an try to diversify its provide chain from China. This effort was accelerated in the course of the Covid-19 pandemic, when a Chinese language manufacturing facility unexpectedly seized manufacturing as a result of lockdown-related protests, inflicting main delays in iPhone deliveries to clients in the course of the 2022 vacation season. Apple is just not the one U.S. tech big diversifying away from China post-Covid; Microsoft and Amazon have moved a few of the Xbox and Fireplace TV manufacturing from China to India and Vietnam, respectively.
Apple’s iPhone manufacturing in India is ramping up shortly. In its final fiscal yr led to September, Apple doubled its iPhone manufacturing in India to $14 billion value from the earlier yr, Bloomberg reported in April. At this time, 1 in 7 iPhones bought globally are made in India. Apple goals to make 1 / 4 of all iPhones in India within the subsequent 4 years.
In 2023, Foxconn, Apple’s largest contractor headquartered in Taiwan, introduced a $1.5 billion funding within the southern Indian state of Tamil Nadu, a $600 million plant in Karnataka, and a $500 million plant in Telangana. These state-of-the-art factories can be set as much as assemble iPhone 16 Professional and Professional Max fashions within the nation for the primary time. Foxconn now produces two-thirds of all of the iPhones inbuilt India. Indian conglomerate Tata Group, the primary home producer of iPhones, has promised to make India’s largest issue for producing Apple merchandise.
In the meantime, the Indian authorities is providing beneficiant subsidies to Apple’s manufacturing companions to construct crops within the nation. These subsidies embrace a “production-linked incentive” scheme, which supplies revenue-based annual payouts to producers like Foxconn for as much as 5 years, which helps soften the huge fastened prices that go into constructing new crops. The scheme started in 2020 and expects to pay out $20 billion over 5 years.
One other incentive for Apple to shift manufacturing to India is the rising geopolitical rigidity between China and India, stemming from a 2020 border dispute. This battle led India to ban a number of Chinese language-owned corporations, together with TikTok, from working within the nation. India additionally imposes excessive tariffs on Chinese language electronics and know-how merchandise, together with Chinese language-manufactured iPhones. The tariffs have posed challenges for Apple to develop market share in India, the place its rising center class is driving demand for Apple’s premium merchandise. Within the 12 months ended March, Apple gross sales within the nation grew 33 % from the yr prior.
Apple opened its first retail retailer in India in 2023. Regardless of holding solely 6 % of the nation’s smartphone market, CEO Tim Prepare dinner referred to as India a “large alternative” in a June 2023 interview with CNBC.
