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India-made iPhone sales increase as Apple shifts production out of China.

In order to diversify its supply chain, Apple sought to move some production away from China last year, which resulted in a jump in volume and price for iPhones made in India.

According to a survey released last week by market research firm Counterpoint, the shipment volumes of iPhones manufactured in India increased by 65% annually in 2022, while their value increased by 162%.

As a result, Apple last year represented 25% of the value of all smartphone shipments from India, up from 20% in 2021, per Counterpoint.

Up to 85% of iPhones are made in China, but as Apple moves more of its manufacturing supply chain outside of China, the country is at risk of losing its dominance.

With escalating geopolitical tensions between Beijing and Washington and in the wake of major manufacturing setbacks in China over the course of three years of strict Covid-19 control measures, Apple is one of the international tech companies looking to reduce its reliance on China for production.

The Indian government unveiled a US$6.65 billion plan in 2020 that provided incentives for international smartphone manufacturers to move their manufacturing there.

Chinese social media users expressed concern that mainland China might lose its dominant position in Apple's manufacturing supply chain as Foxconn Technology Group reportedly plans to invest about US$700 million in a new plant in India to increase local production.

Separately, Reuters reported last month that Foxconn received a contract to manufacture AirPods for Apple and intends to construct a factory in India to manufacture the wireless headphones.

Foxconn would reportedly invest more than $200 million in the new India AirPods plant in the southern Indian state of Telangana, according to a source with firsthand knowledge of the situation.

According to Taiwan's DigiTimes Research, up to 50% of Apple's iPhones might be assembled in India by 2027, up from less than 5% at the moment. According to the report, it will bring it on par with the volume of output in mainland China.

India's confidence in luring more electronics manufacturing to the nation is a reflection of the harm China's reputation has suffered as a result of recent problems faced by Taiwan-based Foxconn on the Chinese mainland.

Following severe disruptions that included violent worker protests and the exodus of tens of thousands of employees amid a Covid-19 outbreak that started last October, Foxconn, formerly known as Hon Hai Precision Industry, hurried to restore full production capacity at its manufacturing complex in the central city of Zhengzhou, home to the largest iPhone factory in the world.

According to Counterpoint, the value of all shipments of Indian-made smartphones increased 34% over the previous year in 2022.

"Overall, 2022 has been a good year in terms of manufacturing and localisation in India," according to Tarun Pathak, research director at Counterpoint. "The 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."

Although they increased in value, Indian-made smartphones had a 3% drop in shipping volume last year as a result of "softening of consumer demand due to macroeconomic headwinds, especially in the second half of the year," according to Counterpoint.



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