The pandemic has prompted iPhone maker Apple to manufacture its devices in India. However, the country’s production lines have just begun to ramp up. Does India have the production capacity to be an alternative to 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, after China and ahead of Vietnam and Mexico. However, there is a huge difference between India and China. According to estimates by data tracking platform Statista, China produced 1.5 billion phones in 2020. However, over the next five years, India is targeting a production capacity of $110 billion worth of phones, of which around 50% will be for the domestic market. Most of Apple’s phones and tablets manufactured in India are expected to be put up for export.
What is India’s production capacity?
According to estimates by industry stakeholders and analysts, phone makers in India produce 300 to 350 million mobile phones every year. This includes all phone makers, although Apple and Samsung are the big two in terms of price. Over 100 million phones made in India are feature phones, which are sold and exported in India. The main difference between Apple and Samsung and others is that their phones sell for higher prices and are therefore more valuable. While Samsung is the largest in terms of value, some expect Apple to become the largest manufacturer in terms of value by the end of 2022.
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Who makes Apple products in India?
Foxconn, Pegatron and Wistron, which are Apple’s three big contract makers, have set up plants in India in the past two years. Apple already manufactures some models of iPhone in the country, such as the iPhone 11. In addition, Chinese conglomerate BYD, one of the largest manufacturers of iPad tablets, also manufactures them in India.
How much can Apple depend on India?
Industry experts have said that Apple’s plan to ramp up India operations may not be completed in a year or two. India-China tensions and concerns over global supply chain bottlenecks have prompted several contract manufacturers, including Apple, to run behind their original estimates. India also revised its flagship production-linked incentive (PLI) scheme last year after companies were not 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, making phones in India meant only assembling imported components. However, industry experts say that many sub-assemblies have now come to the country. This includes camera module manufacturers and battery manufactures. In the long run, this allows the country to add value to manufacturing and create a complete manufacturing ecosystem. The industry today is also turning to mechanics, which include plastics and other materials needed to make mobile phone bodies and parts.