Output of Apple's iPhones in India Soars To $7 Billion In China Shift

There were over $7 billion of iPhones assembled by Apple Inc. in India last fiscal year. The company tripled its production in the world's fastest-growing smartphone market after moving beyond China to build iPhones in other countries as well.

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With increasing number of expansion partners, such as Foxconn Technology Group, Pegatron Corp., and Avalon Research Inc., Apple is now making almost 7% of its iPhones in India, according to people familiar with the matter. That's a significant leap for India, which accounted for about 1% of all iPhones produced globally in 2021.

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With tensions between Washington and Beijing continuing to escalate, Apple is exploring ways to reduce its dependence on China. The longtime partners that make the majority of the world’s iPhones from sprawling factories in China, who declined to give their names as the information isn’t public, said that assembly lines have been added at a rapid pace in the past year.

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It was at Foxconn's "iPipe City" complex in Zhengzhou, where Apple's supply chain became vulnerable and its output estimates were lowered last year, that Apple, the world's most valuable company, suffered from chaos. During the same time, Narendra Modi, the Indian Prime Minister, has thrown out a range of incentives to boost the production of goods locally.

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During the early morning hours of 9:31 a.m. in New York, Apple shares rose 1.1%. 

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During the year ended March 2023, the company exported almost four times more iPhones than in the previous period, according to the people who said Apple exported $5 billion of its total production. Hopefully Apple will begin the next iPhone assembly in India in the fall of 2023 at the same time as the assembly of the next iPhones in China. If so, that will mark the first time that the next iPhones will be produced simultaneously in both countries. It is being speculated that Apple may assemble one quarter of all its iPhones in India by 2025, if its expansion as an iPhone supplier continues apace. Representatives of Apple declined to comment on the report.

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In the past, Apple recognized that it needed to diversify its supply chain, even before the iPhone city incident last year. To ensure that suppliers Foxconn, Wistron Corp. and Pegatron increased their production in India, it successfully lobbied for incentives. With 60,000 employees working at each of the three companies in India, they produce models ranging from the aging iPhone 11 to the new iPhone 14. 

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Consequently, Apple has been at the centre of Indian ambitions to become one of the world's biggest manufacturing hubs and a suitable alternative to China in terms of manufacturing. There are countless companies across the globe that make up the Apple production chain, and it employs millions of people, many of whom are now in China. This is one of the world's most demanding production chains.

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There are many economic benefits to India from the relocation of iPhone production, which could have a profound impact on how other US brands plan their futures. At a time when the Chinese economy is sputtering under the harsh consequences of Covid Zero restrictions, Apple sees the country as a source of future growth.

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As a result, Apple is opening two of its first retail stores in India next week, one in Mumbai, the financial hub of the country, and the other in New Delhi, the capital city. Chief Executive Tim Cook, Apple's chairman and CEO, will fly in personally for the inaugurations, a move that underscores the commercial significance of the market back home. 

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In an effort to expand its local manufacturing capabilities and create mega factories within India, Apple's Cupertino, California-based headquarters has also been seeking changes in the country's labor laws. 

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A representative of Foxconn, Wistron, and Pegatron declined to comment on the proposal or leave a comment on its involvement in the plan. Foxconn, Wistron, and Pegatron have all approved agreements to make iPhone components in a southern state and possibly also make iPhones.