ARCHIVE PHOTO: A man poses with an Apple iPhone 12 at a mobile phone shop in Nantes, France, September 13, 2023. REUTERS/Stephane Mahe/File photoNew Delhi: An increase in iPhone The production and domestic sales of MacBooks, iMacs, iPads, watches and AirPods drove an increase in the value of AppleApple's Indian operations to over Rs 2 lakh crore ($23.5 billion) in FY24, top officials said, up from Rs 1.15 lakh crore in the previous year. They told ET that Apple has probably shown the fastest growth in production and exports of any company in the last 50 years in India, making the Cupertino-based tech giant the largest global value chain (GVC) operating domestically. Apple is also the first GVC in India to rapidly shift a part of its supply chain from China. According to the recent Economic Survey, India contributes about 14% to the US tech giant's total production, emerging as a major hub for its worldwide exportIn FY 2023, India's contribution was about 7%. iPhones dominate the figures. Of the Rs 2-lakh crore valuation, iPhones with a market value of about Rs 1.35 lakh crore ($15 billion) were exported last fiscal, calculations based on official data show.
As per the calculations, domestic sales of Apple products contributed around Rs 68,000 crore ($8 billion) in FY24. In comparison, Apple exported iPhones worth Rs 66,000 crore in FY23. Apple's share in India is less than 6%, though it is steadily increasing from 2% in FY18, as the market is largely dominated by the Android ecosystem – led by Chinese brands like Alive And Xiaomi. Also, India revenue contributed less than 2% of the company’s global revenue of $383 billion in FY23. Apple follows an October-September fiscal year, with fiscal 2024 numbers due in October.
While Apple has had a sales and distribution business in India for many years, the acceleration of operations began only in 2020, when the government announced the Smartphone Production-Linked Incentive (PLI) scheme.
Apple began manufacturing iPhones in India in 2021, the first time it has done so outside China. Since then, iPhone production in India has been steadily increasing through its three contract manufacturers – Foxconn, Wistron and Pegatron – and reached Rs 1.20 lakh crore in FY24. Tata acquired Wistron’s India unit late last year. The government pays incentives on the freight on board (FOB) value at which the device leaves the factory. The market value or selling prices are 50-60% higher.
Based on market value, Apple produced iPhones worth Rs 1.80 lakh crore in FY24. Of the total production, 75% of the iPhones worth nearly Rs 1.35 lakh crore were exported to Europe, the US, West Asia and elsewhere, while local sales accounted for the remaining Rs 45,000 crore. Experts said local production of iPhones has helped Apple expand sales in India, not just for iPhones but also for its product lineup. Apple’s revenue in India reached Rs 68,000 crore in FY24, five times higher than Rs 13,756 crore in FY20. That includes MacBooks, iMacs, iPads, Apple Watches, AirPods and other accessories.
Shipping peak
Export figures aren't included in India's revenue, but the surge in manufacturing by the Apple ecosystem has created more than 150,000 direct jobs since 2021. Foxconn operates Apple's largest factory in the country, with 41,000 employees. Apple CEO Tim Cook told analysts during the company's August earnings call that the company had “set quarterly revenue records in more than two dozen countries and regions, including Canada, Mexico, France, Germany, the U.K., India, Indonesia, the Philippines and Thailand.”
Apple's performance comes as smartphone shipments in India fell 2% year-on-year in the June quarter, according to market tracker Counterpoint Research, which attributed the decline to the heatwave, a seasonal slump and a consecutive slowdown in demand compared to the previous quarter. Underscoring India's importance in the current geopolitical situation, Cook visited India in April last year to meet the prime minister Narendra Modi and open its first two own stores in Delhi and Mumbai.
During the May earnings call, he said, “The company has been working on everything — from developers to markets to operations — in India. I see it as an incredibly exciting market and a key focus for us.”
