Apple Inc. said Monday that it has begun assembling iPhone 14 models in India. Analysts predict that the Cupertino tech giant’s first local production in the world’s second-largest smartphone market in the same year as the new product launch signals a bigger shift in the company’s future manufacturing plans. Apple’s global partner Foxconn is reportedly manufacturing the device at its Sriperumbudur plant near Chennai, and a locally produced iPhone 14 will go on sale in the country later this year.
Apple reportedly began assembling smartphones locally in India back in 2017. But until this year, the company had not introduced a local production line for the latest generation of iPhones.
“We are excited to produce iPhone 14 in India,” a company spokesperson said in a statement in response. Earlier this month, Apple officially introduced the iPhone 14 line of smartphones at its fall launch event.
"Analysts expect India to become the new global manufacturing hub for iPhones by 2025 as Apple tries to gradually reduce its reliance on Chinese foundries -- where it has been making most of its devices for the past decade or so. In a report earlier this month, analysts at JPMorgan said Apple will shift 5 percent of global iPhone 14 production to India and expand local manufacturing capacity by the end of 2022, rising to 25 percent by 2025."
In recent years, the Indian government has been working to turn the country into a manufacturing hub and has attracted investment from Apple’s manufacturing partners Foxconn and Wistron through lucrative subsidies.
JPMorgan analysts added: India’s attractiveness to foreign production giants is also growing, attracted by the abundant local labor resources, and competitive labor costs.
"Previously the Indian iPhone supply chain has been focused only on older models, but interestingly, Apple has asked EMS suppliers to produce iPhone 14 / 14 Plus models in India in the 4th quarter of 2022. This timing is within 2-3 months of the start of production in mainland China, and the shorter interval means that Indian production is increasingly important, and India may get a bigger piece of the iPhone manufacturing pie in the future."
As to why only the iPhone 14 / 14 Plus models are being primarily taken up at this stage, analysts speculate that the iPhone 14 Pro series has a more complex camera module and higher demand for entry-level models in the local market (local manufacturing is more tax efficient).
Even so, analysts expect relatively limited initial sales in the fourth quarter of 2022 — a million units per month, or about 5 percent of total iPhone sales.
Finally, as Apple expands its local manufacturing capabilities in India, many expect the iPhone to be sold more cheaply in the country.
"For reference, the iPhone 14 entry-level model is priced at $799 in the U.S. but Rs. 79,900 in India. The iPhone 14 Pro Max also starts at $1099 in the U.S. and is priced at around $1717 in India."
