Apple Ramps Up iPhone Production in India Triples Output to $7 Billion in FY23 Amid Shift from China
- ByStartupStory | April 14, 2023
Apple Inc. has significantly increased its iPhone production in India, assembling more than $7 billion worth of devices in the last fiscal year. This move comes as Apple aims to diversify its manufacturing beyond China and tap into the growing smartphone market in India, which is the world’s fastest-growing smartphone arena. Through expanding partnerships with Foxconn Technology Group and Pegatron Corp., Apple now manufactures almost 7% of its iPhones in India, a significant increase from the estimated 1% in 2021.
Amid escalating tensions between Washington and Beijing, Apple is reportedly exploring ways to reduce its reliance on China for iPhone manufacturing. The company’s longtime partners, who currently manufacture most of the world’s iPhones in China, have been adding assembly lines at a rapid pace over the past year, according to unnamed sources. Apple faced challenges last year with disruptions at Foxconn’s main “iPhone City” complex in Zhengzhou, which highlighted vulnerabilities in its supply chain and led to reduced output estimates. In response, Indian Prime Minister Narendra Modi has introduced incentives to boost local manufacturing, prompting Apple to expand its iPhone assembly operations in India.
Apple has significantly increased its iPhone production in India, exporting $5 billion worth of iPhones in the fiscal year ending March 2023, nearly four times the previous period, according to unnamed sources. The company is reportedly planning to begin manufacturing the next iPhones in India at the same time as in China, which would mark the first concurrent iPhone assembly in the two countries. If the aggressive expansion of its suppliers continues, Apple could potentially assemble a quarter of all its iPhones in India by 2025. Apple had recognized the need to diversify its supply chain even before disruptions at its main “iPhone City” complex in Zhengzhou, China, last year. The company successfully lobbied for incentives in India and pushed suppliers Foxconn, Wistron Corp., and Pegatron to ramp up local manufacturing, employing around 60,000 workers in India to produce models ranging from the iPhone 11 to the latest iPhone 14. Representatives for Apple declined to comment on the matter.
Apple’s growing production of iPhones in India has positioned the country as an alternative manufacturing location to China, aligning with India’s ambitions to become a significant player in global manufacturing. Known for its meticulous manufacturing standards, Apple’s production chain spans across hundreds of companies worldwide, with a significant portion now located in China. The migration of iPhone production to India represents an economic success for the country and could have implications for other US brands’ future manufacturing plans. India presents a potential source of future growth for Apple, particularly as the Chinese economy faces challenges due to prolonged Covid-19 restrictions.
Apple is gearing up to open its first two retail stores in India, located in Mumbai and New Delhi, next week. CEO Tim Cook is expected to personally inaugurate the stores, highlighting the increasing importance of the Indian market for the Cupertino, California-based tech giant. As part of its efforts to expand local production and create mega factories, Apple has also been seeking changes in India’s labor laws. Its key contract manufacturer, Foxconn, has plans to invest around $700 million in a plant in a southern state to produce phone components and potentially iPhones. Representatives from Foxconn, Wistron, and Pegatron have not immediately responded to requests for comments.
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