Apple lovers in India are all charged up. The “Made in India” iPhone 14 is coming soon.

Apple has confirmed that they have already started making the iPhone 14 at Foxconn’s Sriperumbudur factory in Tamil Nadu. With this, Apple has officially started moving the production of its flagship and premium devices outside China.

Apple started making the iPhone SE in 2017, to free up production lines in their Chinese factories so that they could be used to manufacture newer iPhones.

According to sources, the Made-in-India iPhone 14 will begin to reach local customers in the next few days. Phones manufactured in India will be both for the Indian market and for exports, although there is very little chance of the price of the devices coming down for Indian customers.

Indian business conglomerates are also looking to get in on the action. In a few days, Apple’s Wistron facilities will also start making the iPhone 14 in India. The Tata Group is also looking to partner up with Wistron to set up new facilities for the production of the iPhone 14 and other Apple products.

In a statement to PTI a spokesperson from Apple said:

We’re excited to be manufacturing iPhone 14 in India. The new iPhone 14 lineup introduces groundbreaking new technologies and important safety capabilities.”

The latest iPhone was launched by Apple’s chief executive officer Tim Cook during the company’s annual “Far Out” event on 7 September. The new lineup, which includes iPhone 14, iPhone 14 Plus, iPhone 14 Pro, and iPhone 14 Pro Max has an improved camera, powerful sensors, and satellite connectivity feature to send SOS texts in emergencies.

A recent report by JP Morgan on ‘Apple Supply Chain relocation’ predicted that Apple “is likely to move about 5 percent of iPhone 14 production to India from late 2022 and increase it to 25 percent by 2025.”

It is also forecast that nearly 25 percent of all Apple products will be manufactured outside China by 2025, as compared to five percent at present.

Southeast and South Asian countries like India, Vietnam, and Thailand have become preferable locations for geopolitical diversification away from China for Apple food chain vendors, given their lower labor costs, sufficient skilled manpower support, and appealing policies and government support.

The government of India’s policies to stimulate the electronics sector in India are also a massive reason why Apple and a number of other tech companies, including Google, are looking to set up shop in the country.

After tasting success in local smartphone manufacturing, India is moving swiftly to replicate the success with other parts of the electronics ecosystem, as it makes solid efforts to cut reliance on imports.

The government has unveiled attractive incentives to spur local production and export of telecom and networking equipment as well as IT products, and a Rs 76,000 crore semiconductor scheme was announced late last year to boost local manufacturing of chips and display panels.

To attract global giants such as Intel and TSMC, the government of India increased the financial support for new facilities across technology nodes to cover 50 percent of project cost, in an attempt to get more international tech companies to invest and set up their factories in India.

What does mean for India?

The prices of the iPhone 14 are among the highest in India compared to the rest of the world because of taxes and duties. In India, the prices of Apple’s latest line-up start at Rs 79,900.

The price of the pro model has been hiked by Rs 10,000. The Apple iPhone 14 Pro could cost Rs 1.30 lakh and iPhone 14 Pro Max will go up to Rs 1.40 Lakh, making them the most expensive iPhones to be launched in the country.

iPhone 14 series prices will also include 18 percent GST and 22 percent customs duties (levied before GST).

By manufacturing the iPhone 14 in India, Apple will be able to save 20 percent on import duty. While this may impact the price of the model later there may not be any immediate changes in the pricing, according to a report in India Today.

The new iPhones will only be assembled in the country; hardly any of its components are locally sourced. Hence, the cost of production is expected to remain the same.

Is this the first iPhone to be made in India?

No. The iPhone 14 is the sixth iPhone to be made in India.

Apple started making iPhones in India with the iPhone SE in May 2017 at its contract manufacturer Wistron’s facility in Bengaluru. In 2019, it promoted the iPhone 6s as part of the “Made in India” campaign after its India shipment decreased from 3.2 million units in 2017 to 1.7 million units by the end of 2018. iPhone 11, 12, and 13 were also assembled in India.

The company works with three partners to assemble iPhone models in the country – Wistron, Foxconn, and Pegatron.

Apart from “Made-In-India” labels on the boxes of iPhones sold in India, there has been no change in pricing for iPhone 13, iPhone 12, or the other older models. It is only during the festive sales that iPhones become cheaper because of limited-duration bank offers and cash backs. Local manufacturing doesn’t reduce the MRP, reports News18.

Apple does not make its top-end iPhones like the Pro or Pro Max series in India. Also, the phones made here are for domestic sales within the country.

Most iPhone components are made in China and Apple has to pay import duty on them.

Assembling the phone in India is unlikely to bring down prices as Apple’s OEMs (original equipment manufacturers) pay high rates of import duties on components. Besides import duty, there is 18 percent GST and other fees, and Apple’s profit margin. Hence, the costs remain high, reports Outlook.

Apple also relies on third-party retail networks to sell its smartphones and other products in India which adds to the cost.

According to a Bloomberg report, the first batch of Indian-made iPhone 14 models will be finished by the end of October or early November. This will be the first time that production of a new generation iPhone will begin in another country simultaneously with China.

Stringent COVID-19 restrictions in China hit the production of Apple phones and their exports. To cover the losses, Apple asked its other contract manufacturers in Vietnam and India to ramp up production to meet the demands.

The ongoing geopolitical tensions between Washington and Beijing have pushed the California-based company to not depend so much on the Asian giant.

Analysts at JP Morgan expect Apple to move about five percent of iPhone 14 production from late 2022 to India, which is the world's second-biggest smartphone market after China, reports Reuters. Apple could make one out of four iPhones in India by 2025, JPM analysts said in a note last week.

References:

firstpost.com