Apple’s recent announcement that it will start manufacturing the flagship iPhone 14 in India marks a pivotal shift in the company’s operational strategy, and indicates its strong preference for India as an alternate manufacturing site to its China operations.
JPMorgan estimates that Apple will shift 5% of its global iPhone 14 production to India by end of 2022. By end of 2025, Apple is projected to make 25% of all its iPhones in India. Late last year Samsung had announced that it will be investing $90 Million into its existing facility in Noida, India thereby making it the largest Samsung factory anywhere in the world.
Cell phone manufacturing in India is not new. Due to its burgeoning population, and its growing middle class, India continues to be a large market for cell phones. In recent years, Indian government has more actively sought to bring in foreign investments and grow the country’s manufacturing economy. The “Make in India” initiative, and subsequent infrastructure stimulus in 2017 focused primarily on two of the largest segments for electronics in the Indian market – cell phones and televisions.
While Samsung, Apple and other manufacturers were already established in India at that time, the focus was primarily on catering to the domestic market. With the incentives and resultant investments, Indian cell phone manufacturing is increasingly catering to global demand in addition to fulfilling domestic needs.
As indicated in a recent study, India now exports $4.3 billion of cell phones every year, as opposed to $0.2 billion in 2017, while imports have dropped from $3.5 billion to $1.3 billion in the same duration. While supply chains of these manufacturers have traditionally been heavily dependent on China, in recent years there has been a significant expansion in the number, capabilities and capacity of local manufacturers that supply components for cell phones. This