Apple Inc. intends to use India as the production site for its priciest iPhone Pro and Pro Max models.
TakeAway Points:
- Apple has decided to manufacture the iPhone 16 Pro and Pro Max models in India for the first time in an effort to diversify beyond China.
- India’s iPhone production reached $14 billion, accounting for up to 14% of Apple’s global output, driven by local incentives.
- Local production could reduce prices by up to 10%, with most units exported to Europe, the Middle East, and the U.S.
Apple Increases India-Based iPhone Production
Apple Inc. is set to manufacture its most expensive iPhone Pro and Pro Max models in India for the first time this year, marking a significant milestone for both the U.S. tech giant and India’s manufacturing sector.
Foxconn Technology Group, a key partner, will begin assembling the new iPhone 16 Pro and Pro Max models within weeks of their global launch this fall. The company has already started training thousands of workers at its factory in Tamil Nadu to meet this timeline, according to sources familiar with the matter.
This move is part of Apple’s broader strategy to diversify its manufacturing base beyond China, driven by geopolitical tensions between Beijing and Washington. The initiative has been bolstered by Indian Prime Minister Narendra Modi’s financial incentives aimed at attracting high-end manufacturing to the country. As a result, Apple assembled $14 billion worth of iPhones in India in the fiscal year ending March 2024, accounting for up to 14% of its global output.
Apple’s other partners in India, including Pegatron Corp. and the Tata Group, are also expected to start producing the Pro versions soon. The higher-end models, which feature bigger batteries, better cameras, and titanium bodies, require more specialized production lines. Representatives for Apple, Foxconn, and Pegatron declined to comment, while Tata did not respond to a request for comment.
Expanding market and domestic manufacturing
India, the world’s most populous nation, is becoming an increasingly important market for Apple. The company’s iconic devices are seen as status symbols by the country’s growing middle class.
Apple CEO Tim Cook visited India last year to open the first two Apple stores in the country, where annual sales are nearing a record $8 billion. By the end of the year, iPhones made in India are expected to meet local demand, potentially reducing the prices of the Pro models by up to 10% compared to imported devices, which are subject to import duties.
Despite this, expensive component imports and local taxes will keep the prices of the iPhone 16 Pro and Pro Max higher in India than in some overseas markets with lower or no taxation. The bulk of the India-made Pro and Pro Max devices will be exported to Europe, the Middle East, and the U.S., where demand for these pricier versions are more expensive. However, the upcoming festive season in India could boost local sales.
Apple’s iPhone remains a crucial revenue driver, accounting for roughly half of the company’s global revenue. The new iPhone 16 series will feature enhanced cameras, processors, and displays, aiming to rejuvenate sales that have been sluggish in recent quarters.
Financial and market implications
Apple’s India sales surged 33% to a record of nearly $8 billion over the past 12 months, according to Bloomberg News. This growth supports the thesis that India is a key market for Apple, given the company’s low market share in the country. Analysts Anurag Rana and Andrew Girard from Bloomberg Intelligence project that India’s sales could reach $33 billion by 2030, driven by rising middle-class purchasing power and increased use of payment plans.
The new iPhone 16 Pro models are expected to come with several upgrades, including a new bronze colourway, larger displays, and improved battery life. The iPhone 16 Pro may feature a 6.3-inch screen, while the iPhone 16 Pro Max could boast a 6.9-inch display, the largest ever on an iPhone. These models will also include Apple’s latest A18 Pro chip, promising unparalleled performance, and will come with at least 8 GB of RAM and storage options ranging from 256 GB to 1 TB.
