The pandemic has nudged iPhone maker Apple to eye manufacturing its devices in India. However, the country’s production lines have only just begun ramping up. Does India have the production capacity to become an alternative for Apple? Mint explains:
Where does India stand in the market?
In terms of volume, India is considered the second-largest mobile phone manufacturing country in the world, behind China and ahead of Vietnam and Mexico. However, there is a vast difference between India and China. China produced 1.5 billion phones in 2020, according to estimates from data tracking platform Statista. However, in the next five years, India is targeting production capacity of $110 billion worth of phones, of which about 50% will be for the domestic market. Most of Apple’s phones and tablets manufactured in India are expected to be earmarked for exports.
What is India’s production capacity?
Phone makers in India produce 300 to 350 million mobile phones every year, according to estimates from industry stakeholders and analysts. This includes all phone makers, though Apple and Samsung are the big two in terms of value. Over 100 million of the phones made in India are feature phones, which are both sold in India and exported. The main difference between Apple and Samsung, and others, is that their phones sell at higher prices and are hence more valuable. While Samsung is the largest in value terms, some expect Apple to become the largest manufacturer in value terms by the end of 2022.
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Who makes Apple’s products in India?
Foxconn, Pegatron and Wistron, which are Apple’s big three contract manufacturers, have set up plants in India in the last two years. Apple already manufactures some models of the iPhone in the country, such as the iPhone 11. In addition, Chinese conglomerate BYD, which is among the biggest manufacturers of the iPad tablet, also manufactures in India.
How much can Apple depend on India?
Industry experts have said Apple’s plan to ramp up Indian operations may not materialize in a year or two. Concerns over Indo-China tensions and global supply chain constraints have led many contract manufacturers, including Apple’s, to run behind their original estimates. India even revised its flagship production-linked incentive (PLI) scheme last year, since firms weren’t able to meet the targets. But the good news is that many firms have met the PLI targets this year and are in the process of claiming incentives.
Do we have the necessary expertise?
Historically, phone making in India meant mere assembly of imported components. However, industry experts say many sub-assemblies have now moved into the country. This includes camera module makers, and battery manufacturing. In the long run, this allows the country to value-add to manufacturing and make an entire manufacturing ecosystem. The industry is also pushing towards mechanics today, which includes plastics and other materials required to make the mobile phone’s body and parts.
