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The Bank of America report further said that the share may rise even further if Apple’s vendors expand their operations in the country where it opened two direct retail Apple stores.
New Delhi: India may witness a jump in the manufacturing of iPhones from 7 per cent in FY23 to 18 per cent in FY25 as the Cupertino tech giant is likely to shift the production of iPhones to India on a larger scale driven by the production-linked incentive ( PLI) scheme of the government of India.
“We believe India could be a credible global supply chain alternative for mobile phones/electronics. Success in other sectors is also likely. We believe India’s efforts to cut imports/step-up exports, could improve its macro-outlook,” said Amish Shah, managing director and head of India research at Bank of America.
“Apple may shift >18% iPhone production to India by FY25 Targets under the PLI scheme may drive Apple to shift at least 18% of its global production iPhones to India by FY25 (7% in FY23, negligible pre-PLI). Apple’s share may expand further if larger scale incentivises its vendors to also expand in India,” he said.
The Bank of America report further said that the share may rise even further if Apple’s vendors expand their operations in the country where it opened two direct retail Apple stores. India could contribute to over 5 percent of Apple’s global iPhone sales by FY25.
The market share of Apple in India, which is 4 per cent now, is also likely to go up if locally-made iPhones are made more affordable to people.
Amish Shah also pointed out that 70 percent of a mobile phone’s manufacturing cost involves its display, memory and chips, and these are hard to localize in the near future due to the requirement of higher capex and high-end technology. Key criticism, however, has been that India’s production value add was low at 18 per cent versus China’s 38 per cent and Vietnam’s 24 per cent.
“Analysis of China/Vietnam’s journey also shows that focus on higher scale initially, helped them expand value add ratio long term,” he added in the report.
“We see India contributing >5 per cent of Apple’s global iPhone sales by CY25 & registering 21 per cent CAGR over CY22-25,” Shah said in the report issued Tuesday. The Bank of America report talked about India addressing bottlenecks to become a credible global supply chain alternative on the back of mobile phone manufacturing as a success story.
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