Apple to make iPhone 14 in India

Apple is set to manufacture its latest iPhone 14 models in India as it ramps up production through its contract manufacturer Foxconn, which operates a factory in Chennai.

According to a recent Bloomberg report, India is expected to start manufacturing the new iPhones just two months after they roll out of factories in China, narrowing the six-month assembly gap between the two countries.

Rajeev Khushu, chair of the India Electronics and Semiconductor Association (IESA), said the move by Apple represents a “remarkable shift” in the confidence of big tech companies in India over the last two years.

“The iPhone models were already being manufactured in the country, but now new-generation phones would be getting manufactured here too,” he said. “Earlier, companies like Apple would source older models and were playing it safe. It shows India is evolving and a lot of inhibitors are getting removed.”

India has been ramping up its manufacturing capabilities over the years, drawing companies to tap on its growing design capabilities beyond cheap labour and ready skills.

“Many big MNCs [multinational companies] are now setting up design centres in India, with the second-largest or even the largest development centres out of their headquarters based in India,” Khushu said.

Prachir Singh, senior analyst for smartphone market at Counterpoint Research, said the new investment from Apple bodes well for the future of smartphone manufacturing in India as the tech giant looks to diversify its manufacturing base beyond China.

He noted that Apple has been increasing its production in India, starting with the iPhone 12 and 13 during the first wave, but the devices were shipped five to six months after the initial launch. “This time it’s quite close to the launch and India will see local shipments instead of imported stock,” he added.

Singh cited government programmes like the production-linked incentive scheme as the key reason for top contract manufacturers such as Foxconn and Wistron ramping up capacities in India. “Higher capacities help to achieve incentive targets,” he said.

Whether the India-made iPhone 14s will be cheaper remains to be seen. For earlier versions of the iPhone that were locally made, there was still a reliance on China for essential components, but this could change as India looks to grow its semiconductor manufacturing capabilities.

According to research by Counterpoint Research and IESA, the Indian semiconductor market is slated to reach cumulative revenues of $300bn by 2026 and the share of locally sourced semiconductors could nearly double by 2026.

“If the components are manufactured in India, there should be a good percentage of reduction in the BOM [bill of materials] cost,” said Himanshu Sheth, an engineer who worked at a major smartphone company in India. “This benefit can be passed on to consumers.”

Sheth added that after-sales service could also improve with the iPhone 14 being made in India: “If critical components like the camera and display modules are manufactured and sourced from local plants, iPhone 14 users would have to wait less for getting their phones fixed.”

Khushu expects companies like Samsung and other smartphone players to follow Apple’s move with their latest models coming out of India. “It’s a slow and gradual process for India’s manufacturing evolution on the global map, but we are on the right track,” he said.