NEW DELHI : Production of the iPhone 15, which is likely to be unveiled next month, has started at the factory of Apple’s contract manufacturer Foxconn near Chennai, two people familiar with the development said, the first time an Apple smartphone is being assembled in India before its international launch.
Foxconn, the world’s largest electronics manufacturer, is assembling these devices at its Sriperumbudur facility in Tamil Nadu, even as it expands its local manufacturing operations beyond smartphones.
“One of the units of Foxconn has started making the latest model. The assembly of phones will have limited employability potential, and therefore, we would want them to look at value addition and bring in component manufacturing as well as R&D to the state," a government official said on condition of anonymity.
Bloomberg reported the news earlier in the day. Queries sent to Apple Inc. and Foxconn remained unanswered.
A Foxconn subsidiary inked a $200 million agreement with the Tamil Nadu government for a component manufacturing facility.
The iPhone 15 is expected to be unveiled on 12 September, when Apple holds its annual launch event at its headquarters in Cupertino, California.
“This is the first time that a new-generation iPhone will commence assembly in India prior to its global unveiling, with the iPhone 14 having been manufactured in India shortly after the global cycle. This implies that Apple’s overall local manufacturing mandate is gradually increasing, although there would be little to no market implication of the local manufacturing — be it in terms of prices or sales volumes," said Tarun Pathak, research director, Counterpoint India.
“It isn’t exactly surprising — with iPhone 13 and 14 too, Apple’s India manufacturing partners were largely within the first phase of the iPhone assembly plan globally," said Navkendar Singh, associate vice-president at IDC India.
Apple’s focus on India has been increasing in the past year or so, with the world’s most valuable technology company opening its first fully owned and operated retail stores in the country—in Mumbai and Delhi—and its key manufacturers expanding their presence to meet local as well as global demand. Apple’s partners expanding in India also aligns with the country’s Make in India strategy, where the country is aspiring to be a trusted partner for global supply and value chains, amid companies partially shifting their manufacturing to new destinations away from China after the covid pandemic.
Apple’s iPhone sales in India saw “strong double-digits" growth that led to record revenue for the June quarter, Apple’s chief executive Tim Cook said last week in the earnings call for the quarter. IDC India projects that iPhone shipments will reach 9 million units during 2023, a 40% growth from the 6.5 million units shipped in 2022. Apple shipped around 4.5 million iPhones in 2021 and 2.7 million in 2020.
Greater local manufacturing volumes will be beneficial for India’s overall localization story, sector watchers noted.
“Contract manufacturers in India already have at-par global quality and ample capacity in the assembly lines to make devices, which is why it makes sense for the new iPhones to start being assembled in line with the timelines of Apple’s global manufacturers," Counterpoint’s Pathak said.
But some said the local assembly of the iPhone Pro models would determine the actual success of India’s potential since the models have not been made locally so far because of logistical supply-chain issues, even as the iPhone 13 and the iPhone 14 non-Pro models were made here.
“If Apple does plan to shift making the Pro models of its upcoming iPhones in India, that could be significant since this would imply that the company is shifting its highest tier of smartphone assembly away from China. Otherwise, there is likely to be a very limited impact of Apple’s iPhone 15 India manufacturing plan since Apple does not lower local prices by making its iPhones locally — and availability has never really been an issue for the non-Pro iPhone models," IDC’s Singh said.
Pro versions of the iPhone sell much less, which is why Apple needs scale to make its standard variants of the iPhone. As a result, it makes sense for the company, on cost terms as well as logistics, to retain the assembly of Pro iPhones in the same way as it has been while expanding into other markets for assembling the standard iPhones, analysts added.
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Updated: 17 Aug 2023, 12:19 AM IST
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