As Apple makes further moves to diversify its supply chains outside of China, one of its contract manufacturers, Taiwanese company Pegatron, has opened its mobile factory near Chennai, Tamil Nadu, India.
Pegatron installed the mobile factory under the government’s Production Linked Incentive (PLI) scheme, and iPhone production in India is expected to increase in India.
Pegatron is investing Rs 1,100 crore (US$150 million) to create jobs for up to 14,000 people with the new iPhone installations. The Pegatron facility opened in the presence of Union Minister of State Rajeev Chandrasekhar. “India’s mobile phone exports in 2015-16 were almost zero. They reached around Rs 50,000 crore. India used to be heavily dependent on mobile phone imports. In contrast, today, 97% of mobile phones used in India are domestically manufactured products,” he said.
Pegatron registered its Indian subsidiary in 2020, and production work was slated to begin late last year, but has been delayed for the pandemic.
Apple game plan in India
Apple’s latest release, the iPhone 14, is already being manufactured by another contract player, Foxconn. It’s the first time Apple has started producing its newest phones outside of China so soon after launch. Started shipping the iPhone 14 last week. Media reports say the larger iPhone 14 Plus would ship from Pegatron and Wistron (another Apple device supplier is India) by the end of October. Apple introduced two new iPhone 14 models on September 7.
Apple is expected to move about 5% of iPhone 14 production to India by the end of 2022. According to analysts at brokerage JP Morgan, Apple could make one in four iPhones in India by 2025. Reports claim that about 25% of all Apple products, including Mac, iPad, Apple Watch and AirPods are also expected to be manufactured outside of China by 2025. Currently, only 5% of other Apple products are made outside of China.
For the record, India has the second highest number of smartphone users in the world after China, but Chinese brands like Xiaomi and South Korea’s Samsung dominate the local market.