Can India beat China in iPhone manufacturing? It first needs to create stickiness Apple can’t ignore
Tim Cook has India on his mind.
The other day, the Apple CEO lauded filmmaker Vishal Bhardwaj’s 30-minute film Fursat, shot entirely on iPhone 14 Pro and released on YouTube, for its cinematography and choreography. “It explores what might happen if you could see into the future,” Cook tweeted on February 5.
Just a few days earlier at the December quarter results meeting with analysts, Cook shared that the iPhone maker had achieved an all-time high revenue from India. Cook said in the post-earnings call that Apple “grew very strong double digits in India, Y-o-Y in the last quarter. We feel very good about how we performed. I’m very bullish on India.”
Apple is selling more phones in India now than ever before. While making in India was initially part of Apple’s China (where more than 90% of the iPhones are made) de-risking strategy amid a strained Sino-US relations, the growing Indian market for iPhones comes as the icing on the cake. Also, in 2022, shipments of Apple’s latest device, iPhone 14, were delayed from China factories due to Covid-19 curbs.
Through its three Taiwanese contract manufacturers — Foxconn, Wistron, and Pegatron — Apple is ramping up production in India. Investment bank JP Morgan sees Apple sourcing one in four phones, or 25% of its global production, from India by 2025.
Is India ready?
The increasing local consumption of iPhones makes India an attractive place for the USD394 billion Cupertino giant to manufacture devices locally. Bindiya Vakil, CEO, Resilinc, a California-based global supply-chain mapping and monitoring group, believes, “Growth markets of the future are India and Africa.”
But at present, most of the iPhone making in India is assembly of devices, or what is known as FATP (Final Assembly, Test and Pack), rather than ground-up manufacturing.
While the component ecosystem for Apple products will take time to develop, the country lacks stickiness without that. We will tell you more about this in a bit.
Experts, however, acknowledge that even getting this far — from making earlier-gen devices to the latest iPhones — is a giant leap by Apple in India.
According to a Bloomberg report, Apple exported more than USD2.5 billion worth of iPhones from India during April-December 2022, nearly double than what was exported in the entire FY22, highlighting the rapid shift in iPhone production outside China. December alone saw exports worth USD1 billion from India. “This gives more breadth to India manufacturing,” says Satya Gupta, CEO, EPIC Foundation, a non-profit with a focus on scaling up India’s electronics industry and creating Indian brands and products.
Read More at https://economictimes.indiatimes.com/prime/technology-and-startups/can-india-beat-china-in-iphone-manufacturing-it-first-needs-to-create-stickiness-apple-cant-ignore-/primearticleshow/97704693.cms