Apple iPhone: When will it be Made in India?

Apple is making major moves to focus on India as one of its biggest markets and manufacturing hub in the world. There has been a flurry of activity being reported in south India when it comes to Apple and its contractors. 

In the latest, Bloomberg reported that Apple is undertaking a major reshuffle to its international management with India in view. 

What's happening: 

• Bloomberg cited sources saying that Apple is preparing to establish India as a separate sales region. 
• This change comes following the retirement of Hugues Asseman, the vice president in charge of India, the Middle East, the Mediterranean, Eastern Europe, and Africa.
• Apple Inc now wants to promote India head Ashish Chowdhary and have the head report directly to either Michael Fenger, Apple's head of product sales, or another VP Doug Beck.

As India becomes strategically important, Apple brings some changes. Interesting to see Apple’s India journey now. Growing iPhone sales, focus of partners like Foxconn and deepening manufacturing capabilities to make other Apple category products - all happening simultaneously https://t.co/ToSRdEOsvE

— Danish (@DanishKh4n) March 9, 2023

Why?

• This comes at a time when Apple posted an all-time high iPhone revenue from India. 

• But it's not just the market sales going up in India for Apple that is driving the US tech giant to bring India into focus. 
• Apple has already begun manufacturing some iPhones in India. There has been a myriad of development when it comes to expanding manufacturing in the country. 

Apple: Made in India?

• Apple has been trying to diversify its manufacturing base from China. Currently, 95% of all its iPhones, the cash cow of the company, are made in China. 
• However, the recent Covid lockdowns in China (though rescinded now), the protests at Apple factories and the rising geopolitical tensions between China and the US have all contributed to Apple trying to look at other destinations. 
• India has a slight edge over another country, Vietnam, in terms of the recent rise in consumer base. 
• Apple devices are largely made by its Taiwanese partners - Foxconn, Wistron and Pegatron. 
• Currently, Apple and its partners assembled iPhone SE, iPhone 12, iPhone 13, and iPhone 14 in India.
• April to December 2022 exports from India of iPhones was worth $2.5 billion, nearly double compared to the previous year.  
• Apple is scaling up its manufacturing hub in Andhra Pradesh, Telangana, Tamil Nadu and Karnataka.
• In fact, according to a recent Financial Times report, Apple and Foxconn successfully managed to lobby for labour laws relaxation in the state of Karnataka. 
• Now, the state will allow 12-hour shifts at factories, up from the previous limit of nine hours. 
• Rules are being eased for night-time work for women. 
• Some reports also state that Foxconn invested some $1 billion in its subsidiary in Karnataka last year to set up a manufacturing plant. 

Apple phones to be built in the state soon. Apart from creating about 100,000 jobs, it will create a whole lot of opportunities for Karnataka. Under the visionary leadership of Hon’ble PM @narendramodi Ji, we will do our share to make India a $5 trillion economy by 2025. https://t.co/bdcVuVHkvT

— Basavaraj S Bommai (@BSBommai) March 3, 2023

• Another Apple supplier, Salcomp of Finland, is also said to be planning to double its workforce in India. 

Challenges:

• However, it won't be easy for Apple to replicate the Chinese manufacturing hub in India easily. 
• For one, it took nearly two decades for Apple to build the Chinese base. India won't become the next China for Apple within a short period of time. 
• Second, India is known for its red tape, though state and central governments are both trying to make setting up business in India as attractive as possible. 
• A recent by Financial Times also revealed that there are quality issues when it comes to manufacturing in India, while Apple swears by the zero-defect policy.
• FT reported that only half of the components made at a factory in south India were good enough to be sent to Foxconn to help build iPhones.
• Also, making iPhones is not an isolated process and requires the presence of several other businesses from component makers, service providers, assemblers, testers, infrastructure, logistics, etc. 

But despite the many problems, Apple seems to be steadily making progress with manufacturing in India. Earlier the company used to start assembling iPhones seven to eight months after the launch. But last year, the assembling process began a few weeks after the launch of latest models of iPhones.