With a notable increase in iPhone shipments from India, Apple Inc.’s aim to lessen its dependency on China is gaining momentum. This change demonstrates India’s growing contribution to Apple’s worldwide manufacturing network as the business benefits from the country’s production incentives, highly qualified labor force, and developing technological infrastructure. Apple’s aspirations in India indicate significant wagers on one of the world’s fastest-growing tech markets, since the company’s latest iPhone 16 Pro models are now locally built.
Credits: Money Control
iPhone Exports from India Hit Record Highs
In the first half of FY 2024, Apple exported nearly $6 billion worth of iPhones from India—a year-over-year increase of 33%. This rise suggests that Apple’s export numbers could exceed $10 billion by the end of the fiscal year. To put these figures in context, five years ago, India’s smartphone exports to the U.S. were barely $5.2 million. Today, with iPhones leading the charge, smartphone exports to the U.S. reached a record $2.88 billion in the first five months of this fiscal year alone.
Apple’s key suppliers in India, including Taiwan’s Foxconn and Pegatron, and Tata Electronics—a local conglomerate—have been essential in making this growth possible. Tata, having recently acquired Wistron’s factory in Karnataka, is now the first Indian company to assemble iPhones and contributed approximately $1.7 billion in exports from April to September. Foxconn, with its facilities in Chennai, remains the largest exporter of iPhones from India, accounting for half of the country’s total iPhone exports.
Why Apple is Betting Big on India
Several factors are drawing Apple to expand in India. The Modi administration’s production-linked incentives offer financial support to encourage local manufacturing, which Apple is leveraging. India’s rising tech capabilities and skilled workforce provide the necessary resources for high-quality assembly lines, enabling the production of premium iPhones locally, including the iPhone 16 Pro and Pro Max models with advanced cameras and titanium bodies.
Additionally, India’s burgeoning middle class, with growing purchasing power, makes it an attractive market for high-end brands. Apple’s recent expansion in India’s retail sector underscores this, as CEO Tim Cook personally inaugurated the first Apple stores in Mumbai and New Delhi last year. Plans for more stores in cities like Bangalore and Pune are underway, supported by an aggressive marketing push and online sales strategy.
Credits: Mint
These efforts paid off: Apple’s revenue from India reached an all-time high of $8 billion in FY 2024, and analysts forecast that this could soar to $33 billion by 2030. As Anurag Rana and Andrew Girard of Bloomberg Intelligence suggest, this growth will be fueled by India’s growing middle class, whose preference for premium devices is likely to drive Apple’s market share.
Apple’s India Strategy: A Contrast with China’s Challenges
India’s importance to Apple is growing, especially as the company faces economic and regulatory challenges in China. While China remains Apple’s largest production hub, factors like stringent COVID-19 policies and escalating trade tensions with the U.S. have encouraged the company to seek diversification.
India has become a trustworthy substitute in recent years. In FY 2024, Apple doubled its production output in India by assembling $14 billion worth of iPhones there. This is in line with a larger pattern among international tech companies, who view India as a crucial center for sales and manufacturing.
In Apple’s ecosystem, India still has a ways to go before it can match China’s scale. In contrast to the popularity of Chinese companies like Xiaomi and Vivo, which provide more reasonably priced options in a highly price-sensitive market, India’s market share for iPhones is still less than 7%. However, given the popularity of financing alternatives and payment plans, Apple’s premium brand positioning offers a niche for aspiring Indian consumers.
Outlook: Apple’s Future in India
Apple’s initiatives to increase its manufacturing in India demonstrate the company’s long-term commitment to the nation as a major growing market as well as a location for production. According to analysts, the demand for high-end Apple products would increase in tandem with the growth of India’s middle class. India’s position in Apple’s supply chain is further cemented by the recent increase in exports, and the company’s expanding retail presence throughout the nation enhances its direct-to-consumer connections.
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