Made in India iPhones: Is Apple Choosing India Over China?

Apple is set to produce 85% of iPhones and plans to make iPhone 14 India launch!

Apple’s India plants are expected to contribute 5 to 7% of the company’s global shipments of iPhones this year as the tech giant will manufacture nearly 11-12 million iPhones in the country. Market trackers told the newspaper that the tech giant’s three manufacturers in India would meet 85 % of the local demand for iPhone, touching record highs in 2022.

India will try out a strategy of parallel testing to speed up safety approvals for new electronic devices, an industry group told Reuters on Friday, a move that could boost device launch plans by the likes of Samsung (005930. KS) and Apple (AAPL.O). The move comes as India scrambles to remove bottlenecks faced by businesses, with Prime Minister Narendra Modi bullish on an electronics hardware manufacturing industry to be worth US$300 billion by 2026.

Firms such as Apple, Samsung and Xiaomi (1810. HK) are among its members, along with global and domestic firms operating in India’s electronics, telecom, and IT sector. To trim the time required, the group added, the testing agency, the Bureau of Indian Standards, “has agreed to a pilot project where some identified electronics hardware products shall be undergoing parallel testing”. Executives say India’s cumbersome testing process can take 16 weeks for a new Apple AirPods model, for example, as the charging case and its components must first secure clearance before the earbuds are assessed.

Apple’s Expansion

Apple has three manufacturing contractors in India, including Foxconn, which has its facility near Chennai. The report said Foxconn is likely to make a small batch of the upcoming iPhone 14 in India weeks behind China, according to Apple analyst Ming-Chi Kuo. He added that iPhone 14 production schedule in India is about six weeks behind China, but that gap has improved significantly over the years. However, Apple may begin manufacturing iPhone units in India at the same time as China next year. “Therefore, it is reasonable to expect that India and China will be able to produce the new iPhone 15 at the same time next year,” he tweeted.

Foxconn is likely to make a small batch of the new iPhone 14 in India, just six weeks behind China, as per well-known Apple analyst Ming-Chi Kuo, signaling that by next year, production of the new high-end phone iPhones in India could start concurrently.

India Above China?

Apple currently manufactures the majority of iPhones in China, but over the past few months, it is allegedly moving out production to other countries, such as Vietnam. The ongoing supply chain issues and geopolitical tensions between the US and China could be the major factors behind it. iPhone units produced in China contributed over 95 % to global shipments in 2021 and around 98 % in 2020. Still, this year, the contribution is likely to dip to between 91.2 to 93.5 %, according to Counterpoint Research.

The Indian government’s Make in India initiative has proven to gain Apple’s interest in producing more iPhone handsets in India. Last year, Apple began producing iPhone 13 in India, and this year, the iPhone 14 production could be on the cards, per Canalys.

Why India?

Manufacturing iPhones in India will help the company to cut down the cost price and it can save tax on importing units from different countries. But that doesn’t mean that the company is going to sell the smartphone at a lower price, the selling price will remain the same.