iPhone 14 To Be Made In India, What Locally-Made iPhones Mean For India

Apple's latest iPhone 14 will be made in India, the global tech giant made the announcement on Monday, less than 3 weeks after unveiling the latest iPhone series.

Apple’s global partner Foxconn is manufacturing the iPhone 14 in the Sriperumbudur facility near Chennai and the units will begin to reach local customers in the next few days.

The locally manufactured iPhone 14 will be both for the Indian market and exports.

Apple had worked with suppliers to ramp up manufacturing in India and shorten the lag with China in production from the typical 6 to 9 months for previous launches, Bloomberg had reported in August.

“The new iPhone 14 lineup introduces groundbreaking new technologies and important safety capabilities. We’re excited to be manufacturing iPhone 14 in India,” Apple said in a statement.

One In Four iPhones Could Be Made In India By 2025

Apple started manufacturing iPhones in India with iPhone SE in 2017. It later started making other iPhone models in the country, including iPhone 12, iPhone 13, and now, iPhone 14.

Analysts estimate that Apple will turn India into a global iPhone manufacturing hub by 2025 as it slowly cuts its reliance on China, where it has been producing the vast majority of its devices for over a decade.

Apple has widened its production capability in India through its contractors including Foxconn and Wistron. It reportedly shipped almost a million ‘Made in India’ iPhones in the first quarter of this year.

According to a report from Counterpoint Research, locally manufactured iPhones in India grew 196 per cent YoY in 2021. Further, only 23 per cent of iPhone shipments in India last year were imported, a significant reduction from the 64 percent imports in 2019.

A JP Morgan report said Apple will move 5% of global iPhone 14 production to India by late 2022 and expand its manufacturing capacity in the country to produce 25% of all iPhones by 2025.

Apple is not the only big brand making phones in the country, its rival Samsung has set up one of its largest factories in India. Besides, Xiaomi, Oppo, Vivo, and OnePlus also locally assemble many of their handsets in the country.

Google is also likely to move some of Pixel smartphones’ production to India. Google last week said it will launch the upcoming Pixel 7 models in India.

Will India-Made iPhone 14 Be Cheaper In The Country?

Apple has traditionally relied on China to produce its products, but given the rising hostilities between US and China, it is now looking at alternative manufacturing locations. 

It doesn’t mean that India-made iPhones will be cheaper in the country as these would be only assembled here and most of the components required would still be imported on which Apple would be playing 20 per cent import duty.

Along with import taxes, there are other expenses, such as the 18% GST, Apple’s profit margin, and import duties. As a result, the price of iPhones produced locally will be still expensive.

This is one of the reasons the price of iPhone SE, iPhone 11, and iPhone 12, did not see any cuts.

The iPhone 14 is priced at Rs 79,900 for the base 128GB variant. The phone also comes in 256GB and 512GB models that have been priced at Rs 89,900 and Rs 1,09,900 respectively.

What Locally Made iPhones Mean For India

India is the world’s second-biggest smartphone market and considering the demand, it makes sense for Apple to expand manufacturing capacity here.

According to analysts, locally assembled iPhone 14 models would boost Apple's Make In India plans.

Apple has long been trying to cut its dependence on China as a manufacturing base for its iPhones, on the other hand, India is rolling out sops for companies to boost its make-in-India initiative.

That, coupled with the PLI scheme, means India wants to emerge as a major manufacturing hub. All three Taiwanese Apple suppliers making iPhones in India have opted for the PLI scheme.

Made-in-India units will meet 85% of the local demand for iPhone, touching record highs in 2022, against just 10-15% last year. Further, Indian factories are expected to make 5-7% of all iPhones sold globally this year. In 2021, India’s contribution stood at a little over 3% and the number was less than 1.5% in 2020.

Besides, it would also open job opportunities as only the Sriperumbudur Foxconn plant employs about 18,000 workers of which more than 11,000 are women. Wistron’s workers have surged to about 9,000 from just 2,000 before the start of the pandemic.