5

What's New?

A close look at Garvita India’s strategy We feel privileged that part of our job includes interacting with industry veterans and gaining …

The Mapping Revolution

Know how MAPS of the FUTURE will solve real-life problems. Today we will talk about the Mapping Revolution, that is expected to …

In this blog, we uncover the economics of Installing a Rooftop Solar Power System. Many people saw their electricity bills skyrocket this …

In this blog, we will talk about the opulence of spending by wealthy Indians and cover Stanley Lifestyle that caters to them. …

In this blog, we delve into the investing wisdom of Mr. Anil Goel. “I lost all the money I had made till …

INDIA – The apple of Apple Inc.’s eye

Today we will talk about the evolution of Apple Inc. in India and how it became arguably the biggest smartphone company in the country.

Apple is as closely associated with smartphones as it is with the fruit, if not more so. While one keeps the doctor away, people wait in line to buy the other. That’s the kind of brand Apple (the phone one) is. People go crazy during the launch of every new Apple device. 

They literally camp outside stores to buy the devices before they sell out, which they always do. Amusingly, this phenomenon still prevails across the globe.

Initially, in India, having an iPhone became a status symbol. In the US, people were using iPhones just because everyone around them had one. But in India, you bought an iPhone because not everyone could afford one. It was like a badge of honor, you know? 

But today, things have changed drastically for Apple in India. The country has gone from being just another market with little presence, to becoming one of Apple Inc’s most important markets today. This evolution has been quite fascinating to study. 

So, let’s dig into it. 

Evolution of Apple: Through Indian Lens 

When I say iPhones were a luxury during the early days, I am not kidding. Apple officially entered the Indian market back in 2010 with the introduction of iPhone 3GS. At that time, 16GB iPhone was priced at a whopping Rs. 35,500! And if you wanted the 32GB version, you had to fork over Rs. 41,500.

Yeah, these prices were, to put it mildly, batshit crazy! Not many could afford it. But the idea of having a device with a touchscreen that you could use for calling, taking photos, listening to music, and most importantly, browsing the internet, was really alluring. 

As a result, alternative routes quickly developed. Some bought iPhones while traveling to the US or Canada, where prices were about a third of what they were in India. For those who couldn’t travel, a black market for imported iPhones from other countries quickly emerged. 

Over time, Apple grew its footprint in India by teaming up with big retailers. Concurrently, a thriving grey market for unauthorized imported iPhones emerged. This mix of official expansion and the grey market drove a surge in iPhone popularity and demand in India. 

Then came the next stage of evolution 

Manufacturing in India 

Apple assembled iPhones and other products in China, but rising labour costs there were a concern. To diversify its supply chain, Apple looked to India, which had a large population like China. India was also becoming more business-friendly under PM Modi, while the US under Trump was taking an increasingly aggressive stance against China. These factors made India an attractive alternative manufacturing base for Apple. 

As a result, Apple started manufacturing entry level products and legacy headsets through Foxconn, Pegatron and Wistron. However, after COVID happened, the need to stop solely relying on China became more urgent. 

As a result, from 2022, Apple started assembling iPhone 14 in India. Since, then there has been a rapid expansion of Apple in India.

From 2023 onwards, Apple has been assembling latest iPhones in India. In FY24, it produced $14B worth of iPhones here, accounting for 14% of its total global output. And guess what, Apple has plans to take this higher.

Foxconn is the top manufacturer, making 67% of Indian iPhones. Pegatron is second with 17%, while Tata-owned Wistron makes the remaining 16%. This also led to the exports of iPhones from India.

Exports

Currently, 70% of all iPhones made in India are exported. Apple’s iPhone exports from India nearly doubled from $6.27 billion in FY23 to $12.1 billion in FY24. This made Apple the biggest smartphone exporter from India, surpassing Samsung. Apple has emerged as the largest exporter of smartphones from India, surpassing Samsung. This growth in iPhone export has propelled smartphones into top 5 most exported commodities from India.

The company is expected to achieve a milestone of Rs 1 lakh crore in exports for FY25.

Now, Indians are not only assembling iPhones but also buying them at a record pace.

Sales

Apple India’s revenue crossed Rs. 70,000 crore, driven by strong iPhone sales and exports. Last year, Apple opened its first official stores in India in Mumbai and Delhi, which became its top performers worldwide.

In Q1 2024, Apple Inc. set a revenue record in India, hitting $2 billion, even as global revenue declined 4%. As a result, India is now Apple’s 4th largest market trailing USA, China and Japan.

With better products, easy financing options, and growing popularity, Apple’s India revenue is expected to keep rising. All of this has been made easy due to government support

Govt. Support: PLI Scheme for the Win

The PLI scheme offers cashback incentives starting at 6% of incremental sales for the first two years, then dropping to 5% for years 3-4 and 4% in year 5. In 2023, Apple not only met but exceeded its production and export targets under this scheme. As a result, Apple’s manufacturers – Foxconn, Pegatron, and Tata-owned Wistron – received over Rs 4,400 crore in PLI incentives for FY23. This figure is expected to rise further in 2024,

This brings us to the next stage.

The Future of Apple in India

Currently, Apple has 14% of its total production in India, which it expects to increase to 25% by 2028. The company plans to shift at least half its supply chain to India and boost local value addition by 50% in 3 years. They aim to grow their Indian workforce to 500,000, moving half their China supply chain. Domestic value addition should rise from 11-12% to 15-18%.

The company targets producing over 50 million iPhones annually in India in 2-3 years, with even higher volumes after. Contract manufacturers are rapidly expanding facilities.

More Apple suppliers are entering India. The government has approved 14 suppliers to set up here. Simpo Technologies, a battery maker, has established operations, while Corning Glass is also building a facility. Apple is also in talks with Indian companies for supplier agreements. All this will significantly grow Apple’s footprint in India.

Suffice it to say that in Apple’s China plus One Strategy, India will play a major role.

Fin Meme of the Week

You would be lying if you said that you had not done this 😉



Follow us


error: Content is protected !!
Scroll to Top

Latest Updates

Coverage Status Company Update Date Research Material Report
Active ***** 5th July 2024 Business Understanding Note
Active ***** 7th June 2024 Quarterly Update - Q4 FY24
Active ***** 30th May 2024 Business Understanding Note
Active PSP Projects Ltd. 26th May 2024 Quarterly Update - Q4 FY24
Active ***** 24th May 2024 Quarterly Update - Q4 FY24
Active ***** 17th May 2024 Quarterly Update - Q4 FY24
Active ***** 9th May 2024 Quarterly Update - Q4 FY24
Active ***** 3rd May 2024 Quarterly Update - Q4 FY24
Active ***** 1st May 2024 Business Understanding Note
Active ***** 26th April 2024 Quarterly Update - Q4 FY24
Inactive ***** 14th April 2024 Business Understanding Note
Active ***** 9th April 2024 Business Understanding Note
Active ***** 1st April 2024 Business Understanding Note
Active ***** 28th March 2024 Business Understanding Note
Active ***** 26th March 2024 Business Understanding Note
Active ***** 26th March 2024 Business Understanding Note
Active PSP Projects Ltd. 11th March 2024 Business Understanding Note