Apple to manufacture 18% of flagship iPhone in India by 2025: Report

Why you're reading this: With the inception of the PLI scheme in 2020, the central government has approved Foxconn Hon Hai, Wistron, and Pentagon, who are the prominent contract manufacturers of the tech giant Apple to start their production in India. This further paved the way for India as a global manufacturing hub of electronics.

3 things to know:

• Apple store in India was a distant dream until April this year
• Increasing production in India could boost exports 
• The flagship phone market is very popular in India, a production rise may bring relaxation to the price

Apple may shift over 18 per cent of the production of its flagship phone 'iPhone' to India by 2025, according to a report from the Bank of America. The report further highlights that this is done in support of initiatives by the Indian Government through the 'Production Linked Incentive' scheme. According to the report, India's share in iPhone production stood at 7 per cent of the global market. 

 "The iPhone exports from India have risen to Rs 40,000 crore in FY23. It was Rs 11,000 crore in FY22. This is expected to accelerate further as it has already reached a run-rate of $1 billion of monthly exports since February this year. Apple's share may expand further if it incentivises its large-scale vendors to also expand in India. Apple could also see share gains (4 per cent now) within India's mobile phone market by improving the affordability of locally made iPhones and shifting in favour of premium products. We see India contributing over 5 per cent of Apple's global iPhone sales by CY25 and registering a 21 per cent CAGR over CY22-25," the report said.

"Apple's decision to manufacture its latest iPhones here is a sign of growing confidence in India's potential to be one of the large manufacturing destinations, as it aims to diversify manufacturing outside of China, it said. The report also added that mobile phones are 21.5 per cent of India's domestic electronics demand and are growing at 15 per cent compounded annually. "Since FY17, mobile phone production/exports are up 3.9x/65x, while imports are down to a third," the report adds.

The report further reveals that the PLI scheme has helped the rate of exports increase from 16 per cent to 25 per cent. In April, Apple CEO, Tim Cook inaugurated the first Apple Store in India and the country is also expected to get three more stores in the next four years.

“India is at a tipping point and it feels great to be here. You can feel the vibrancy and dynamism. The feeling that anything here is possible,” Apple CEO told the media during the inauguration of the first store.

This is also expected to be a big relief for the Indian consumer market as the demand for flagship phones in India has relatively increased with different measures from the lenders like no-cost EMI and other financial tools. The production rise in India could further reduce the price in India which is at present not afforded by most of the people residing in the country.