India gets a bigger bite of the Apple iPhone

The iPhone is a touchscreen-based smartphone that uses Apple’s iOS mobile operating system. Designed, developed, and marketed by Apple the first revolutionary iPhone was unveiled in San Francisco, America on January 7, 2007, by Steve Jobs, the co-founder of Apple Inc. According to Steve Jobs, it was a lightweight handheld device that was a combination of – a mobile phone, an iPod with touchscreen, and an internet communication device with desktop-quality email, web browsing, searching, and maps. On June 29, 2007, it hit stores in America but it wasn’t until November of the same year, that it became available outside of the US, in Germany, UK, and France. The first iPhone to arrive in India was in August 2008. Described as a ‘game-changer’ then, the 3G model came with the local Vodafone and Airtel networks. It soon began to form India’s luxury mobile phone industry and since then has had an almost cult-like following creating euphoria each time a new model is released. Today with iPhones manufactured in the country, India’s association with Tim Cook and Apple Inc. has come a long way.

Few fun facts about your favorite Apple iPhone

1. The original project was a much guarded secret code named ‘Project Purple 2’.
2. Every image of the iPhone shows the time as 9.41. Scheduled to be announced at 9.41, Steve Jobs missed it by a minute. Later since the iPad announcement happened on dot 9.41 local time Apple continued with the image.
3. In 2007, Cisco Systems sued Apple after Steve Jobs announced the ‘iPhone’ at the Macworld convention. Cisco sued Apple for trademark infringement since it was already using the name Linksys iPhone. However, the dispute was settled for an undisclosed price and iPhone since then has become synonymous with Apple.
4. Apple’s App Store was not a part of the first mobile phones. It was rolled out on 10 July 2008.
5. Apple has filed over 200 patents for iPhone.
6. In 2016, Apple iPhones made it to No.1 in the ’50 Most Influential Gadgets’ of TIME Magazine. It was described as a gadget that ‘fundamentally changed our relationship to computing and information’.
7. In June 2016, Apple CEO Tim Cook during an employee meeting at the Cupertino facility announced that Apple iPhone sales had touched the 1-billion mark.
8. The most expensive component of these phones is the retina screen priced at USD 43.
9. iPhone is Apple’s biggest revenue earner contributing to over 60%.
10. According to a survey, 83.4% of Apple iPhone users would buy the same brand.
11. iPhone 7 continues to be the most commonly used model even in 2019 with a 5.62% share in the overall smartphone market.

iPhone and India

While ‘i’ in iPhone primarily stands for internet, Steve Jobs added Instruct, Inspire, Inform and Individual never supposing someday ‘i’ would denote India too. Apple now manufactures its flagship iPhone 11 at the Foxconn plant near Chennai, India.

A close association – India is not only the second-largest smartphone market in the world after China but is also technology driven and capable of manufacturing smartphones.

Taking a cue from souring relations between China and the world due to the coronavirus outbreak, the Indian government was quick to launch a Production Linked Incentive (PLI) scheme to attract electronics manufacturing in India. India’s PLI scheme came into effect on August 1, 2020. The brainchild of PM Narendra Modi’s government, it aims to attract foreign investment mainly in the mobile phone sector. This scheme with an outlay of INR 40,000 crore extends to mobile phones and electronic components like Printed Circuit Boards (PCB), photopolymer films, and Assembly Testing Marking Packaging (ATMP) units. The PLI scheme outlines that companies which manufacture mobile phones priced at INR 15,000 and above and which will make a cumulative investment of INR 1000 crore over four years starting with INR 250 crore in the first year will qualify for an incentive of 6% for the first two years followed by 5% for the next two and 4% in the fifth year subject to sales reaching INR 25,000 crore over five years.

Riding on this PLI scheme, Apple Inc. intends to produce up to USD 40 billion worth of iPhones, mainly for exports through its contract manufacturers in India, Wistron and Foxconn.

Wistron plant near Bengaluru has been operational since May 2017, manufacturing iPhones for exports. It used to earlier produce the iPhone SE, which is now discontinued. Today this facility manufactures iPhone 7 and is soon expected to undertake the manufacture of iPhone SE.

Foxconn on the other hand has plans to invest up to USD 1 billion to expand its plant capacity located near Chennai. Recently, it was chosen as the manufacturing hub for iPhone 11, Apple’s flagship model launched in September 2019. Definitely, this decision to locally produce the iPhone11 costing INR 63,900/- helped save Apple close to 22% import duty. The Foxconn facility also has a production line for Apple’s iPhone XR.

Pegatron which is the second-largest iPhone assembler after Foxconn is actively considering investing in India to set up a local subsidiary. Once, that happens Apple’s dependability on India as a manufacturing hub is sure to increase and improve.

Apple India Growth
Mobile phone exports from India is expected to reach USD 100 billion by 2025. While on one side, 80% of the total manufacturing capacity was used to export the iPhones under ‘Make in India’ PLI incentive, on the other, iPhone local sales also began to show a rise.  As per CyberMedia Research, the India unit of Apple sold 1.7 million units of iPhones in 2018. In Q1 of 2018-19, Apple in India enjoyed an overall market share of 65% in the mobile phone segment priced above USD 500. But by Q1 of 2020, Apple witnessed a 78% year-on-year (YoY) growth in the India sales of iPhones despite the coronavirus pandemic. Mainly iPhone 11 Pro and iPhone 11 Pro Max contributed to this growth. CEO Tim Cook to acknowledge India as a ‘key’ market for Apple Cupertino’s continued growth is gearing the company to launch the first online store in India and its first physical retail store by 2021. This will greatly benefit the Apple iPhone and iPad users to avail of Apple’s hallmark services like Apple Care.

India is finally getting

a bigger bite of the Apple!