Apple announced Monday that it has begun assembling the iPhone 14 models in India, producing the current lineup locally for the first time in the same calendar year in the world’s second largest smartphone market, as analysts predict a greater shift in the American giant’s future manufacturing. Foxconn, the company’s global partner, is producing the device in the Sriperumbudur facility near Chennai. The locally manufactured iPhones will be available in the country later this year. “We’re excited to be manufacturing iPhone 14 in India,” an Apple spokesperson said.
Apple began locally assembling smartphones in India in 2017, but up until this year, the iPhone manufacturer used the Indian manufacturing facilities to assemble older generation handsets. This month, Apple released the iPhone 14 models.
Analysts predict that Apple will transform India into a global iPhone manufacturing hub by 2025, gradually reducing its reliance on China, where it has been producing the vast majority of its devices for more than a decade. JP Morgan analysts said earlier this month that Apple will shift 5% of global iPhone 14 production to India by late 2022 and expand its manufacturing capacity in the country to produce 25% of all iPhones by 2025.
In recent years, India has attracted investments from Apple manufacturing partners Foxconn and Wistron by offering lucrative subsidies as New Delhi works to establish the country as a manufacturing hub. According to JP Morgan analysts, the presence of foreign manufacturing behemoths, combined with “ample labour resources and competitive labour costs,” makes India a desirable location.
“Historically, India’s iPhone supply chain has only supplied legacy models.” Interestingly, Apple has requested that EMS vendors produce iPhone 14/14 Plus models in India in 4Q22, two to three months after production begins in Mainland China. “The much shorter interval implies that India production is becoming increasingly important, and that future iPhone allocations to India manufacturing will most likely be higher,” the report added.
“We believe Apple now only manufactures iPhone 14/14 Plus models in India due to the more complex camera module alignment of the iPhone Pro series (which is done by EMS vendors) and higher local market demand for the iPhone 14 series” (tax savings). We anticipate that volume will begin slowly in 4Q22 (1 million units per month, or 5% of total iPhone volume).”
Many will hope that as Apple expands its local manufacturing capacity in India, it will make its handsets more affordable in the country. The base iPhone 14 model, which costs $799 in the United States, costs 79,900 Indian rupees ($980). The entry-level iPhone Pro Max model costs $1,717 in India, compared to $1,099 in the United States.
Despite having a tiny market share in India, Apple has increased its investment in the country over the last five years. It launched its online Apple Store in the country two years ago and has publicly stated that it is working to open the country’s first physical store.
Apple rival Samsung has already identified India as a key global manufacturing hub, establishing one of its largest factories there. Xiaomi, which currently leads the market, as well as its competitors Oppo, Vivo, and OnePlus, all locally assemble a number of their handsets in the country.
Google also intends to shift some Pixel smartphone production to India. The company, which skipped shipping flagship models in India for two generations, announced last week that the upcoming Pixel 7 models will be available in the country.