Apple said Monday that it has started putting together iPhone 14 models in India. This is the first time the current lineup has been made locally in the same calendar year in the world’s second-largest smartphone market. Analysts think this is just the beginning of a bigger shift where the American giant will make things in the future.
The device is being made at the Sriperumbudur facility near Chennai by Foxconn, the company’s global partner. Later this year, the iPhones made in the country will go on sale there. In a statement to TechCrunch, an Apple representative said, “We’re excited to be making the iPhone 14 in India.”
Apple started putting together smartphones in India in 2017, but until this year, it used manufacturing facilities to put together phones from older generations. Apple’s iPhone 14 models came out earlier this month.
Analysts think that by 2025, Apple will make India a global hub for making iPhones as it slowly moves away from China, where it has been making most of its devices for over a decade. In a report released earlier this month, JP Morgan analysts said that by the end of 2022, 5% of all iPhone 14 production would move to India. By 2025, 25% of all iPhones will be made there.
In the past few years, India has received investments from Apple’s manufacturing partners Foxconn and Wistron by offering them generous tax breaks. This is part of New Delhi’s plan to make India a manufacturing hub. JP Morgan analysts said that India is a good place to live because there are many foreign production giants, and there are “plenty of labor resources and competitive labour costs.”
“India’s iPhone supply chain has only made older models in the past. Apple has asked EMS vendors to make the iPhone 14 and 14 Plus in India in 4Q22, about two to three months after production starts in Mainland China. The much shorter time gap shows that production in India is becoming more important, and the report says that in the future, India will likely get more iPhones to make.
“We think Apple only makes iPhone 14 and 14 Plus models in India now because EMS vendors do the iPhone Pro series’ more complicated camera module alignment, and the local market wants iPhone 14 models more” (tax savings). We expect the volume to start small in 4Q22 (1M monthly units, or 5% of total iPhone volume).”
As Apple builds more factories in India, many people hope it will make its phones more affordable there. The basic iPhone 14, which costs $799 in the United States, costs 79,900 Indian rupees ($980) in India. In contrast, the entry-level iPhone Pro Max costs $1,717 in India but only $1,099 in the U.S.
Even though Apple only has a small market share in India, the company has put more money into the country over the past five years. It opened an online Apple Store in the country two years ago, and the company has publicly said that it is working on opening its first physical store there.
Samsung, a competitor of Apple, has already set up one of its biggest factories in India, which it sees as a key manufacturing hub worldwide. Xiaomi, which currently has the most popular smartphone, and its competitors Oppo, Vivo, and OnePlus also build some of their phones in China.
Google also wants to move some of the production of its Pixel phones to India, according to a recent report from The Information. The company skipped shipping flagship models to India for two generations but said it would launch the Pixel 7 models last week.