Apple is considering shifting more and more of iPhone production to India amid increasing geopolitical tensions
The Cupertino-based company is expected to move around 5% of iPhone 14 production to India by late 2022
Apple has set a production target of INR 47,000 Cr (around $615 Mn) for the current fiscal in India
According to analysts at brokerage firm J.P. Morgan, Apple Inc may make one out of four iPhones in India by 2025.
Per a Reuters report, Apple is considering shifting more and more of iPhone production to India amid increasing geopolitical tensions and strict COVID-19 lockdowns in China.
According to J.P. Morgan analysts led by Gokul Hariharan, “Taiwanese vendors such as Hon Hai and Pegatron play a key role in the relocation to India. In the medium to long term, we also expect Apple to qualify local India manufacturing suppliers.”
J.P. Morgan noted that the Cupertino, California-based company is expected to move around 5% of iPhone 14 production to India by late 2022. It is prudent to mention that India is the world’s second-biggest smartphone market.
The production shift is not going to be limited to iPhones only, according to the Reuters report. Around 25% of all Apple products, including Mac, iPad, Apple Watch and AirPods are expected to be manufactured outside China by 2025 as well. Currently, only 5% of other Apple products are made outside China.
Media reports from earlier this month noted that India might account for at least 12% of the free-on-board (FOB) value of Apple iPhones manufactured by its vendors worldwide. The ratio comes from data submitted by Wistron, Foxconn and Pegatron to the Indian government.
Apple began production of the iPhone in India in 2017, via Wistron and Foxconn. New Delhi has been bullish on local manufacturing and the tech giant’s move remains in line with the country’s outlook on manufacturing.
Interestingly, the Cupertino-based giant already has shifted a significant portion of manufacturing to India. Apple has been manufacturing iPhone 13 in India, with plans to manufacture iPhone 14 in India already in the works.
One of Apple’s suppliers, Wistron, is also reportedly in talks with the Indian conglomerate Tata Sons to set up a joint venture to manufacture iPhones in India. Last year, the Indian government asked the tech giant to manufacture products worth $5 Bn annually over the next five years.
Consequently, Apple has set a production target of INR 47,000 Cr (around $615 Mn) for the current fiscal in India. Apple will also be one of the beneficiaries of the production-linked incentive (PLI) scheme for electronics manufacturing.
With the pandemic disrupting supply chains, there is pressure for companies with a large dependence on China to move elsewhere. Companies such as Google are also looking at India as a lucrative manufacturing hub.