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BENGALURU: Apple’s ‘Made in India’ smartphone shipments grew 65% by volume and 162% by value in 2022 over the previous year, reflecting the extent of manufacturing capacity it has added in the country. The value increase took the brand’s value share to 25% in 2022, up from 12% in 2021, showed data from research firm Counterpoint.
A number of Apple partners, including Foxconn, Wistron and Pegatron, are assembling the latest iPhones here. Media reports have said Pegatron is looking to build a second factory in Chennai after it inaugurated the first one six months ago. Taiwanese iPhone maker Foxconn is said to be planning to set up electronics manufacturing plants in Bengaluru and Telangana.
Oppo led the ‘Made in India’ smartphone shipments in 2022 with a 22% share, followed by Samsung. The contribution of exports in ‘Made in India’ smartphone shipments reached the highest ever in 2022 both in volume (20%) and value terms (30%).
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How Apple is going big on India in shift from China
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<p><b>How Apple is going big on India in shift from China</b></p>
<p><b>Apple’s partner Foxconn is planning to invest about $700 million on a new plant in India to ramp up local production, underscoring an accelerating shift of manufacturing away from China as Washington-Beijing tensions grow.</b><br /><br /><br /></p>
<p><b>The Karnataka government on Monday, through its state high-level clearance committee (SHLCC), cleared the proposed Rs 8,000-crore investment by Taiwanese company Foxconn.</b><br /></p>
<p><b>Apple has been shifting production away from China after the country’s strict Covid-related restrictions disrupted the manufacturing of new iPhones and other devices in the country and also to avoid a big hit to its business from tensions between Beijing and Washington.</b><br /></p>
<p><b>In January, Union minister Piyush Goyal said that Apple, which began iPhone assembly in the country in 2017 through Wistron Corp and later Foxconn, wants India to account for up to 25% of its production from about 5-7% currently.</b><br /></p>
<p><b>Foxconn has bagged an order from Apple to make AirPods in India and it is likely to invest $200 million for same. A Reuters report said that Foxconn plans to set up a factory in Telangana, with construction to start in second half of 2023 and production to commence by end-2024.</b></p>
<p style=”line-height:1.7999999999999998;text-align: justify;margin-top:0pt;margin-bottom:0pt;”>As part of its shift, Apple is seeking changes in India’s labour laws to expand local production, and state governments are yielding to its request as they are eager to snatch iPhone assembly from China.</p>
<p><b>Recently, Karnataka introduced a legislation to pave way for one of the most flexible working regimes in the country. It will now allow 12-hour shifts, as well as night-time work for women.</b><br /></p>
<p><b>In fact, Apple and its supplier Foxconn were among the companies that lobbied for the landmark liberalisation of labour laws in Karnataka.</b><br /></p>
<p><b>After Karnataka, Tamil Nadu, where Apple’s top supplier Foxconn Technology Group operates the nation’s largest iPhone plant, is also considering passing new rules that will make factory shifts more flexible.</b><br /></p>
<p><b>Prime Minister Narendra Modi’s local manufacturing push, financial incentives and India’s relatively cheaper labor have led companies like Foxconn, Pegatron and Wistron to ramp up in the South Asian nation.</b><br /></p>
<p><b>Other Indian states such as Andhra Pradesh, Gujarat and Uttar Pradesh, home to Samsung’s smartphone factory, will also possibly follow Karnataka and Tamil Nadu, according to reports.</b><br /><br /><br /></p>
<p><b>In further boost for localisation, Tata Group has reportedly been eyeing the Taiwan-based Wistron’s manufacturing facility in Karnataka that assembles iPhones. Bloomberg reported that Tata plans to close the acquisition by March this year.</b><br /><br /><br /></p>
The Counterpoint report said increasing exports from Apple, Samsung and other OEMs drove the locally manufactured shipments in 2022 and somewhat offset the impact of the local demand decline. Overall, ‘Made in India’ smartphone shipments declined 3% year-on-year in 2022 (January-December) to reach 188 million units, the report said. The demand slowed due to macroeconomic headwinds, especially in the second half of the year. In Q4, the decline was 19%.
Counterpoint’s senior research analyst Prachir Singh said, “The high inventory, which has impacted the overall supply of smartphones, is now being felt at the manufacturing level. However, the premiumisation trend is benefitting some of the manufacturers. Apple’s EMS (electronics manufacturing services) partners Foxconn and Wistron were the fastest-growing manufacturers among the top 10 in the fourth quarter of 2022. The growth was also fuelled by increasing exports from Apple. In terms of overall exports, a volume growth of 37% year-on-year was seen.”
Counterpoint’s research director Tarun Pathak said, “Overall, 2022 has been a good year in terms of manufacturing and localisation in India…The recent disbursement of PLI (production-linked incentives) from the government as well as other initiatives, both at the central and state levels, has boosted the overall local manufacturing. We are now seeing multiple companies investing in India and expanding their manufacturing base. Also, the component and semiconductor ecosystem are witnessing investment growth due to the government’s continuous efforts. However, the government should focus on developing the overall ecosystem and play on India’s strengths like high local demand, developing local talent and improving overall infrastructure.”
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