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| Image By: The Registi on Unsplash |
According to sources familiar with the development, Apple Inc. is manufacturing 70% of the mobile phones it sells in the domestic market in India, as part of a big push toward "Make in India."
This represents a significant shift in Apple's approach following the government's Production Linked Incentive (PLI) plan, which began in FY21 and saw a 30% increase just two years ago.
Foxconn, one of Apple's three local vendors, is now producing the best-selling model, the Apple 11, as well as the Apple 10 and Apple 12.
The Apple SE 2020 is made by Wistron, another contract manufacturer. (Pegatron, the third, has yet to begin manufacturing.)
The Apple 12 Pro and Pro Max are the only models that are imported (due to their low volume but high value).
A spokeswoman for Apple did not react to questions posed to them.
According to Faisal Kawoosa, founder of Techarc, a company that measures volume production, Apple phones Made in India accounted for barely 5% of the total sold in India in 2017.
By 2020, it would have risen to 60%. It is now 75% after the Apple 12 was also started to be made in India.
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According to reliable sources, Apple's value addition for mobile devices in the country is presently approximately 15%.
However, under the PLI system, the three contract manufacturers have promised the government that they will increase this percentage to 30% in five years.
To give you a sense of scale, Apple's value addition in China is roughly 40-45 per cent.
According to sources familiar with the situation, the value addition committed by the vendors collectively is obviously attainable, as Apple is already in talks with Indian companies through its vendors to make component deals.
One such partnership under consideration is with Tata Electronics, which is investing Rs 4,700 crore in Tamil Nadu to build a mobile component manufacturing unit.
According to analysts, Apple is increasingly reducing the time between the debut of a new model in India and its production here.
They point out, for example, that Apple began producing the Apple SE in India in 2017 when the phone was already a couple of years old.
In India, the Apple 11 was released in September 2019 and production began in July 2020.
The Apple SE 2020 was introduced in April 2020, and production began within three to four months.
Despite the pandemic and its problems, the most recent model, the Apple 12, was released in October and was manufactured in less than six months.
Experts predict that the corporation will generate $3 billion in revenue in India by the conclusion of its fiscal year, which recently concluded in September, based on current trends.
This indicates a significant increase over the previous fiscal year's figure of less than $2 billion in India.
Despite the significant growth, India accounts for less than 1% of Apple's global revenue, which is estimated to reach $330-$340 billion this year.
Apple has chosen India as a major country in its aspirations to minimise its reliance on China as a manufacturing base for exports, where 90 per cent of its gadgets are built.
That is why Apple's vendors are participating in the PLI programme, which provides Apple with a 4-6 per cent incentive if it reaches certain investment and output goals.
Apple's contract manufacturers have agreed to produce Rs 3.4 trillion worth of iPhones in India over the next five years, with 80% of those being exported over that time.
Despite the fact that Pegatron has yet to begin manufacturing, the vendors have already invested more than half of the Rs 3,000 crore required during this time.
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