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Apple holds under 7% of India’s smartphone market
The US tech giant exported nearly $6 billion of India-made iPhones
Apple has significantly ramped up its iPhone exports from India, with a report indicating a 33% increase in the six months leading up to September. This expansion underscores Apple’s strategic initiative to enhance manufacturing capabilities in India while reducing its dependency on China.
According to a report by Bloomberg, the tech giant exported nearly $6 billion of India-made iPhones, positioning annual exports to potentially exceed $10 billion in fiscal 2024.
Rapid Manufacturing Expansion
The company is swiftly expanding its manufacturing network in India, capitalising on local subsidies, a skilled workforce, and advancements in the country’s technological landscape. India has become a pivotal player in Apple’s strategy to mitigate risks associated with manufacturing in China, particularly amid rising tensions between Beijing and Washington, the Bloomberg report added.
Key Suppliers and Their Contributions
Three of Apple’s key suppliers—Taiwan’s Foxconn Technology Group, Pegatron Corp., and India’s Tata Electronics—are actively assembling iPhones in southern India. Foxconn’s facility near Chennai stands out as the largest supplier, contributing to half of India’s iPhone exports. Additionally, Tata Electronics, which acquired its assembly unit from Wistron Corp. last year, exported approximately $1.7 billion worth of iPhones from its Karnataka factory during the April to September period.
Contribution to India’s Economy
iPhones have become the backbone of India’s smartphone export sector, helping the category emerge as the leading export to the US, valued at $2.88 billion in the first five months of the current fiscal year, according to federal trade ministry data.
Five years ago, India’s smartphone exports to the US were a mere $5.2 million, reflecting the transformative growth driven by Apple’s manufacturing presence.
Market Dynamics
Despite this progress, Apple holds just under 7% of India’s smartphone market, which is predominantly led by Chinese brands like Xiaomi, Oppo, and Vivo. However, Apple is making significant investments in the region, particularly with the introduction of the iPhone 16 Pro and Pro Max models, supported by government subsidies.
Future Growth Projections
With plans to expand its retail presence, including new stores in Bengaluru and Pune, Apple’s growth trajectory in India appears promising.
Bloomberg Intelligence analysts have predicted that Apple’s sales in India could soar to $33 billion by 2030, largely driven by the rising purchasing power of the middle class and increased adoption of payment plans.
Challenges Ahead
While Apple is thriving in India, its performance in China has faced challenges due to economic downturns following strict COVID-19 lockdowns and a property crisis. Despite India’s burgeoning potential, it remains unlikely to surpass China as Apple’s primary market in the near future.
In the fiscal year ending March 2024, Apple assembled $14 billion worth of iPhones in India, doubling production efforts and enhancing its diversification strategy away from China.
Apple’s Q3 China Smartphone Sales Slip, Huawei’s Soar
Apple’s iPhone sales in China slipped 0.3% while rival Huawei posted a 42% surge in the third quarter of 2024, as competition intensifies in the world’s largest smartphone market.
Apple reached second place with a 15.6% market share, though down 0.5 percentage points year-on-year, while Huawei claimed third place with 15.3%, gaining 4.2 percentage points, news agency Reuters reported citing data from researcher IDC on Friday.
Vivo, which primarily sells budget phones, was the top vendor with a market share of 18.6%.
The contrasting performances follow Huawei’s comeback last year in the premium segment with its Mate 60 series, featuring what analysts said is a domestically produced chip.
The Chinese tech giant further challenged Apple’s position with its latest Pura 70 model released earlier this year.
Apple has faced additional headwinds in China, including restrictions on iPhone use by some government agencies.
The US tech giant has since responded with multiple discount campaigns to boost sales.
The third-quarter performance was partly helped by the new iPhone 16, which went on sale on September 20. On the same day, Huawei launched a competing product- a tri-foldable phone.
The new iPhones got off to a strong start in China, with sales 20% higher in the first three weeks since launch compared with the 2023 models, according to separate data from researcher Counterpoint.
Overall, China’s smartphone sales for the third quarter rose 3.2% to 68.78 million units.
(With agency inputs)
