Apple strives to reduce dependence on China, India’s iPhone exports reach US$6 billion

Apple’s iPhone exports from India rose by a third in the six months to September, underscoring its efforts to expand manufacturing in the country and reduce its reliance on China.

The U.S. company exported nearly $6 billion of iPhones made in India, a value that increased by a third year-on-year, people familiar with the matter said. They spoke on condition of anonymity because the information is not public. This puts annual exports on track to exceed about $10 billion in fiscal 2024.

Apple is rapidly expanding its manufacturing network in India, taking advantage of local subsidies, a skilled workforce and advances in the country’s technological capabilities. India is an important part of the company’s efforts to reduce its reliance on China, where risks have grown as Beijing strains relations with the United States.

Three of Apple’s suppliers – Taiwan’s Foxconn Technology Group and Pegatron Corp, as well as local Tata Electronics – assemble iPhones in southern India. Foxconn’s local unit in suburban Chennai is India’s largest supplier, accounting for half of the country’s iPhone exports.

The electronics manufacturing unit of salt-to-software conglomerate Tata Group exported about $1.7 billion worth of iPhones from its factory in Karnataka state from April to September, people familiar with the matter said. Tata acquired the unit from Wistron last year, becoming the first Indian assembler of Apple’s best-selling products.

Dollar figures refer to the estimated factory value of the equipment, not retail price. An Apple representative declined to comment. Pegatron also declined to comment, and spokespersons for Foxconn and Tata did not respond to requests for comment.

iPhones accounted for the bulk of India’s smartphone exports and helped the product category become the largest export to the US in the first five months of this fiscal year at $2.88 billion, according to the Union Trade Ministry. Five years ago, before Apple expanded production in India, India exported just $5.2 million in smartphones to the United States annually.

Still, Apple’s share of the Indian smartphone market is just under 7%, which is dominated by Chinese brands such as Xiaomi, Oppo and Vivo. While the iPhone market remains small globally, Apple is making a big bet.

Subsidies from Prime Minister Narendra Modi’s government helped Apple assemble pricey iPhone 16 Pro and Pro Max models in India this year, which feature better cameras and titanium bodies. It is also looking to open new retail stores, including in the southern tech hub of Bengaluru and the western city of Pune.

Last year, Chief Executive Tim Cook opened the first Apple stores in financial hub Mumbai and the capital New Delhi.

Grand openings, a marketing blitz around the new stores, an aggressive online sales push and the rapid growth of a middle class eager to own Apple products pushed the company’s annual revenue in India to a record $8 billion in the year to March. Dollar.

What does Bloomberg say?

We calculate that sales in India could reach $33 billion by 2030, driven primarily by rising middle-class purchasing power and greater use of payment plans.

– Anurag Rana and Andrew Girard, Analysts

Apple’s rising star in India contrasts with its slump in China, where the economy is reeling in the wake of harsh Covid-19 lockdowns and a real estate crisis. To be sure, Apple relies on China for much of its manufacturing and sales, and India is unlikely to become its biggest market anytime soon.

Apple assembled $14 billion worth of iPhones in India in the fiscal year ending March 2024, doubling production and accelerating its diversification outside China. Among them, iPhone exports are approximately US$10 billion.

–With assistance from Mark Gurman and Jane Laney Lee.

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