Tata Expands iPhone:
Apple products are experiencing skyrocketing demand in India, one of the world’s most populous nations. Tata Electronics, one of three Apple iPhone manufacturers in the country, is poised to strengthen its role in Apple’s supply chain. The Indian tech giant already operates two factories producing iPhones and is set to acquire a significant share in a third facility.
According to a Reuters report, Tata is purchasing a 60% stake in the Tamil Nadu manufacturing unit of Taiwan-based this supplier Pegatron. Under the agreement, Tata will oversee daily operations, while Pegatron retains a 40% stake, providing technical support. However, Tata, Pegatron, and Apple have yet to comment on the deal officially.
Apple has historically relied on China for most of its production, including this Phones. However, in light of the ongoing US-China technology tensions, the company is strategically diversifying its manufacturing operations. India has emerged as a critical alternative due to its government incentives, skilled workforce, and advancing technological infrastructure.
In the six months from April to September 2024, India exported approximately $6 billion worth of iPhones, three times the value compared to the same period the previous year. Tata Electronics alone contributed $1.7 billion to this figure. In the fiscal year 2023-2024, India manufactured this worth $14 billion.
Currently, 1 in every 7 iPhones globally is manufactured in India, accounting for 14% of total production. Pegatron assembles 17% of iPhones, while Foxconn handles a commanding 67%. Analysts predict that India’s share in global this shipments could rise to 20-25% in the current fiscal year, compared to 12-14% in 2023.
This rapid growth in India’s role within Apple’s supply chain is notable but not without challenges. While China remains dominant in producing advanced and intricate iPhone components, India’s capacity to match that sophistication is still developing.
Apple itself does not manufacture iPhone components directly. Instead, the company collaborates with multiple suppliers for assembly, ensuring quality by meticulously overseeing every step of the process.
India also offers Apple a lucrative and expanding market. it sales in the country have been growing significantly, with Bloomberg Intelligence forecasting that the annual iPhone market in India could reach $33 billion.
China remains a vital market for Apple, but the relationship has grown complicated in recent years. Rising nationalist sentiment and competition from local giants like Huawei have created a challenging landscape for the company. As a result, Apple’s move to diversify manufacturing and focus on India is both strategic and timely.
The question remains: How far can India go in replacing China as a key player in Apple’s manufacturing and market ecosystems?