In 5 months, Apple shipped $1B dollars worth of iPhone out of India

From Sankalp Phartiyal's "Apple iPhone Exports From India Doubling in Boon to Modi’s Plan" posted Tuesday on the Bloomberg:

Apple's iPhone exports from India crossed $1 billion in the five months since April, according to people familiar with the matter, signaling the South Asian nation is making progress with its bid to become a force in electronics manufacturing.

At the current rate, outbound shipments of India-made iPhones, mainly to Europe and the Middle East, are set to reach $2.5 billion in the 12 months through March 2023, the people said. That’s almost double the $1.3 billion worth of iPhones India exported in the year through March 2022, the people said, asking not to be named as the data isn’t public.

While India makes up just a small fraction of iPhone output, rising exports bode well for Prime Minister Narendra Modi’s plan to make the country an alternative to China as factory to the world. Apple, which long made most of its iPhones in China, is seeking alternatives as Xi Jinping’s administration clashes with the US government and imposes lockdowns across the country that have disrupted economic activity.

“The healthy growth in Apple’s manufacturing scale and export shows India is gradually assuming an important position in the company’s China plus one strategy,” said Navkendar Singh, an analyst at tech researcher IDC. “And for India, this a big sign of the success of its financial incentives scheme.”

My take: Tim Cook's diplomacy and persistence seem to be paying off.

6 Comments

  1. Horace Dediu said:
    It will take at least 6 years to transfer production out of China. One can only hope it’s long enough.

    6
    October 4, 2022
    • Mordechai Beizer said:
      @Horace

      And how long do you expect it to take to transfer semiconductor production out of Taiwan? One without the other is still a big vulnerability.

      2
      October 4, 2022
      • Horace Dediu said:
        I don’t expect that transfer to occur. Nor is there a need to.

        3
        October 4, 2022
  2. Bart Yee said:
    Here’s additional perspective on India:

    Apple sold 5.4M iPhones in India in 2021. Of that mix, iPhone SE, 11 and 12 were made locally, and Pro Models imported. iPhone 13 production started in April 2022. Apple is expected to sell a bit over 7M iPhones in 2022 according to Techarc research. iPhone 14 production has just started.

    iPhones still represent as aspirational products that appeal to upper end Indian consumers as well as the growing middle class and young people who have some means.

    If we assume iPhone 14 Pro models, iPhone 13 Mini and maybe a few other older models are imported for sale and rest locally built, imports may make up 25-30% of India sales while the base models prove more affordable and without additional levies.

    It’s not clear if the Bloomberg quoted value of $1B is the wholesale or retail price of units exported but let’s assume it’s retail. With a favorable mix, average exported sales prices could be around $650, giving about 1.54M units produced for that amount. The $2.3M threshold for March 2023 would represent ~3.5M units exported.

    If 7M for 2022 India sales, and 30% imported (2.1M), then 4.9M are made in India for domestic sale. Given 3.5M exports by March, India partners are making up to 8.4M by March 2023. Assuming 230M iPhones overall being made and sold worldwide, India Production is currently at 3.7% of total and Apple analysts have pegged 5% or ~11.5M as their short term goal.

    0
    October 4, 2022
  3. Daniel Epstein said:
    I think the significant point of India Iphone production is for the local market. India’s policy mandate is working and Apple is smart to cooperate. Of course it is useful to have some ability to produce more products for export in India if needed and having the skill set developed gives the Apple suppliers some options if they needed to expand production outside of China. I could easily see that if Apple decided it needed more production than the current status quo supply chain can handle then they could benefit from the diversity of production sites going forward and help develop them. Given the geopolitical climate Apple likely is covering its bets with all deliberate speed. Prudent business expansion.

    2
    October 4, 2022
  4. John Butt said:
    Bloomberg and IDC.

    The most trusted names in data information? Is anything about this report based on anything?

    3
    October 4, 2022

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