iPhone 15’s make in India status further diversifies Apple’s supply chain

iPhone 15’s make in India status further diversifies Apple’s supply chain

Tech News

The iPhone 15, launched with a higher resolution OLED display, a higher resolution 48MP camera, the A16 Bionic custom processor designed in-house for the iPhone 14 Pro last year, and the pill-shaped ‘Dynamic Island’ notch that was also introduced in the latter, will be available in India starting 22 September, and is priced onward of 79900. The new ‘Pro’ iPhones start at 1.35 lakh.

Apple also unveiled the first mainstream 3-nanometer (nm) custom processor—A17 Pro—used in its iPhone 15 Pro series.

It also launched two new wearables—Watch Series 9 and Watch Ultra 2, with chief operating officer, Jeff Williams, affirming that the Watch Series 9 is “Apple’s first-ever carbon-neutral product.” Prices of the latter start at 41900.

The move marks the first time that Apple, through multiple contractual manufacturing partners, made its latest generation iPhones in India prior to its global launch event. So far, Apple has heavily depended on China for meeting its manufacturing demand—now, industry stakeholders say that Apple’s move shows an increasing sense of intent from the world’s most valuable company.

On 16 August, Mint reported that Apple, through Taiwanese manufacturer Hon Hai Precision Industry Co. Ltd—known better as Foxconn—commenced assembly of its iPhone 15 lineup in India. However, two senior industry officials told Mint that Apple only assembled its non-Pro iPhone 15 models in the country—the manufacturing of its flagship iPhone 15 Pro series remains away from India.

A senior industry consultant for the technology sector, who works with various companies as well as the Centre, said requesting anonymity, “That Apple has diversified its assembly of the latest generation iPhones to India doesn’t come as any surprise. India as a nation has plenty of assembly capacity, and making its phones here gives it decent leverage to meet its expected demand. While this does show that India’s impact on the global technology supply chain is gradually increasing, a bigger step would have really come through if Apple would have brought the assembling of its more sophisticated ‘Pro’ iPhones to India.”

A second official added that the move marks “India’s increasing importance in the global manufacturing chain, showcasing that the local market is capable of catering to the most sophisticated technologies.”

Other companies have also affirmed this—on 23 August, Raju Pullan, head of Samsung India’s mobile business, told Mint that Samsung assembled its latest generation foldable smartphones in its Noida facility for the very first time.

In May 2017, Apple made its first ever iPhone in India—when it commenced the assembly of a limited batch of its first generation iPhone SE in the country. A year later, Apple also began making its then-already-dated iPhone 6s series in India—the first time that a flagship-grade Apple smartphone was assembled in the country.

Its more recent smartphones have, however, been made in India closer to their launch dates. In March 2021, reports said that Apple had commenced assembling its iPhone 12 series—which was launched in October 2020—in India. The iPhone 13 also followed a similar timeline, although Apple commenced India assembly of its iPhone 14 lineup sooner—in September itself.

The iPhone 15, however, marked faster progress, with local assembly commencing in time to be shipped to retailers for the first batch of sales.

Industry stakeholders, however, have indicated that there would be no major market implication of the local manufacturing process. Navkendar Singh, associate vice-president at market research firm IDC India, said, “If Apple does plan to shift making the Pro models of its upcoming iPhones in India, that could be significant since this would imply that the company is shifting its highest tier of smartphone assembly away from China. Otherwise, there is likely to be a very limited impact of Apple’s iPhone 15 India manufacturing plan since Apple does not lower local prices by making its iPhones locally — and availability has never really been an issue for the non-Pro iPhone models.”

Singh affirmed that this holds true because the ‘Pro’ iPhones have more sophisticated components, which demand a more specialized supply chain instead of the standard iPhones. While setting up such a supply chain isn’t impossible, experts believe that this will only make sense for Apple to do so once greater demand for its Pro iPhones builds in the local market—and the requisite supply chain grows in India.

Apple’s local market share in the smartphone market is also expected to grow. According to Singh, Apple could ship up to 9 million iPhones in India this year—up by nearly 40% from the 6.5 million iPhones that it shipped last year. Retailers and industry stakeholders have affirmed Apple’s sustained demand in the smartphone market, stating that increasing affordability through financing schemes have been key to Apple’s rising market share—even in years when the overall smartphone market demand remained tepid.

Apple also launched its latest generation smartphone, the Apple Watch Series 9, during its event.

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Updated: 13 Sep 2023, 01:00 AM IST

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