A Careful Balancing Act

Apple CEO Tim Cook has been optimistic about India for years, and now the tech giant is expanding its footprint in the country while reducing its reliance on China. However, analysts say that Apple's dependence on China will continue for years to come, despite the potential for India to become a new manufacturing hub for the company.

  • Apple recently opened its first two retail stores in India, but its strong presence in China due to its supply chain partners, superior infrastructure and supplier inertia means that it will take several years for the company to fully diversify away from China
  • The urgency to move assembly of products from China has increased in recent years due to trade tensions and supply chain disruptions caused by Beijing's Covid-19 policies, which have impacted Apple's bottom line

Manufacturing And Selling

Apple has increased its manufacturing of iPhones in India from 1% in 2021 to 5-7%, with further plans to expand its presence in the country. While China, the US, and Europe are still the primary markets for Apple, India is expected to become a top 5 market focus for the company in the coming years.

  • Analysts believe that India can be a significant growth driver for Apple, although the goal of producing 25% of all iPhones in India is seen as "lofty" and achieving 10-15% seems more realistic in the long term
  • While Vietnam remains the preferred location for products such as MacBooks, smaller products like AirPods and smartwatches are expected to be manufactured in India soon
  • In 2022, Apple shipped 6.7 million iPhones in India, a significant increase from the previous year. Dan Ives, an analyst at Wedbush Securities, called India "the golden goose" for Apple due to its population growth and potential for sales
  • India thus presents significant growth opportunities for Apple in both manufacturing and retail sales, as it is the second largest smartphone market in the world and accounted for almost 12% of global sales in 2022

Additionally, Apple is likely to open more physical stores in India, particularly in major urban centers like Delhi and Mumbai.

Premium Brand For Rising Middle Class

IDC's data indicates that low-to-mid-priced smartphones are still preferred by consumers in India, which is why Apple currently only holds a 5% market share.

  • However, Fitch's Soni predicts that as technology adoption increases and consumers' purchasing power strengthens, iPhone sales will rise in India
  • According to Soni, there is a growing trend of customers buying flagship smartphones, especially since 4G is now widely available in India, and the middle class is becoming more affluent


Please note that this article does not constitute investment advice in any form. This article is not a research report and is not intended to serve as the basis for any investment decision. All investments involve risk and the past performance of a security or financial product does not guarantee future returns. Investors have to conduct their own research before conducting any transaction. There is always the risk of losing parts or all of your money when you invest in securities or other financial products. Please note that the writer of this article is not registered as a financial advisor.


Photo by Naveed Ahmed on Unsplash.