Made-in-India iPhones increase as Apple shifts production from China

A man walks past the barricade of India's first Apple retail store, that will be launched soon, at Jio World Drive Mall, Mumbai, India, 5 April 2023.

iPhones made in India increased in volume and value last year as Apple moved to shift some of its production away from China to diversify its supply chain, ANI reported citing South China Morning Post.

In 2022, the shipment volumes of iPhones manufactured in India increased by 65 per cent year on year. In addition, the value of iPhones rose by 162 per cent, South China Morning Post reported citing a report published by market research firm Counterpoint last week. Last year, Apple accounted for 25 per cent of the value of India's total smartphone shipments, which shows a rise from 12 per cent in 2021, the SCMP reported citing the Counterpoint.

China manufactures up to 85 per cent of iPhones around the world, Xinmei Shen said in the South China Morning Post report. However, Beijing faces the risk of losing its dominance as Apple is taking measures to shift its manufacturing supply chain outside China.

Apple is among the global tech brands that are seeking to reduce their reliance on China for production amid rising tensions between Beijing and Washington and production disruptions in China due to the Chinese government's stringent Covid-19 measures, according to the South China Morning Post report.

In 2020, India launched a USD 6.65 billion plan that offered incentives to global smartphone makers for shifting their production to the country. Apple contract manufacturer Foxconn Technology is reportedly intending to invest around USD 700 million in a new plant in India to enhance local production, according to the news report.

The decision has raised concerns among social media users in China that the country was at risk of losing its primary role in Apple's manufacturing supply chain, Xinmei Shen said in the news report. India is expected to assemble up to 50 per cent of Apple's iPhones by 2027, which shows an increase from fewer than 5 per cent at present, The South China Morning Post reported citing Taiwan's Digitimes Research forecast in January.

The production will make India on par with the scale of production in mainland China, as per the South China Morning Post report. Foxconn, formally known as Hon Hai Precision Industry, scrambled to restore full production capacity at its manufacturing complex in Zhengzhou after severe disruptions that included worker protests and an exodus of thousands of employees amid a Covid-19 outbreak.

On 5 March, Foxconn announced a major investment in Karnataka that will generate over one lakh jobs, according to an official statement. As much as 300 acres of land has been identified for this purpose near the Bengaluru International Airport in Doddaballapura and Devanahalli taluks.

During his visit to India, Young Liu met with Prime Minister Narendra Modi. They discussed topics related to enhancing India's tech and innovation ecosystem.

Hon Hai Technology (Foxconn) tweeted, "Chairman Young Liu is visiting India. Today we had a warm meeting with Honourable Prime Minister @narendramodi and updated him on our good progress in the country. Foxconn will continue to build an ecosystem in India allowing all our stakeholders to share, collaborate and thrive."

In response to a tweet by Hon Hai Technology Group (Foxconn), PM Modi tweeted; "Had a good meeting with Young Liu. Our discussions covered various topics aimed at enhancing India's tech and innovation eco-system."

Apple says 'Hello Mumbai'

Apple on Wednesday revealed the look of its first retail store in India, as several people tried to catch a glimpse outside the store's black and yellow artwork patterned after Mumbai's iconic taxis, Reuters reports.

The store is still in barricades and is likely to open this month, a person familiar with the matter told Reuters.

India has become a big market for the Cupertino, California-based company, which launched an online retail store in the world's second-largest smartphone market in 2020.

Still, due to its high prices, Apple has only a 3 per cent share of India's smartphone market.

Apple has previously faced hurdles in opening physical retail stores in the country, with 2021 launch plans delayed because of the Covid-19 pandemic.

Apple products, however, have been sold in India for years on e-commerce platforms such as Inc AMZN.O and Walmart Inc's WMT.N Flipkart, as well as through resellers.

India is also increasingly becoming a manufacturing base, with some Apple products, including iPhones, assembled in the country by Taiwanese contract electronics manufacturers Foxconn 2317.TW and Wistron Corp 3231.TW. Apple also plans to assemble iPads and AirPods in India.

The first retail store is located in the premier Reliance Jio World Drive mall, home to various luxury clothing and jewellery brands like Michael Kors, Kate Spade and Swarovski.

The brightly-lit store was "inspired by the iconic Kaali Peeli taxi art unique to Mumbai," Apple said in a statement, referring to the city's decades-old yellow and black taxis.

People were taking selfies and recording videos on their smartphones outside the store on Wednesday evening, with the Apple logo decked out in a variety of colours and a version of the classic Apple greeting showing "Hello Mumbai".