As Apple makes more moves towards diversifying its supply chains out of China, one of its contract manufacturers, the Taiwanese company Pegatron, opened its mobile manufacturing facility near Chennai, Tamil Nadu, India.
Pegatron has set up the mobile manufacturing facility under government’s Production Linked Incentive scheme (PLI), and iPhone production in India is expected to increase in India.
Pegatron is investing Rs 1,100 crore ($150 million) with employment generation for as many as 14,000 people with the new iPhone facility. The Pegatron facility was inaugurated in the presence of Union Minister of State Rajeev Chandrasekhar. “Mobile phone exports in India in 2015-16 were near zero. They have reached around Rs 50,000 crore. India used to be heavily dependent on imports of mobile phones. In contrast, today, 97% of mobile phones used in India are products of domestic manufacturing,” he said.
Pegatron registered its Indian subsidiary in 2020, and the production work was expected to start late last year, but was delayed to the pandemic.
Apple’s game plan in India
Apple’s latest launch iPhone 14 is already being manufactured by another contract player Foxconn. It is the first time that Apple has started producing its newest phones outside of China so soon after their launch. It has begun shipping the iPhone 14 last week. Media reports have it that the bigger iPhone 14 Plus would be shipped by Pegatron and Wistron (another Apple device supplier is India) by the end of October. Apple unveiled two new iPhone 14 models on September 7.
Apple is expected to move around 5% of iPhone 14 production to India by late 2022. According to analysts at brokerage firm J P Morgan, Apple may make one out of four iPhones in India by 2025. Reports claim that around 25% of all Apple products, including Mac, iPad, Apple Watch and AirPods are expected to be manufactured outside China by 2025 as well. Currently, only 5% of other Apple products are made outside China.
For the record, India has the second-largest number of smartphone users in the world after China, but Chinese brands such as Xiaomi and South Korea’s Samsung dominate the local market.