India's iPhone manufacturing competes with China, yet its global revenue contribution remains low due to affordability challenges. In 2024, Indian facilities produced 14-15% of Apple's iPhones, set to rise to 26-30% by 2027. India emerges as a key manufacturing hub. Despite revenue growth to $8 billion in FY24, India's share is 2% of Apple's total. With potential revenue growth, Apple aims to strengthen its foothold in India's tech market, emphasizing iPhone sales and market expansion.
India's Apple iPhone manufacturing capabilities are rapidly approaching those of China, marking a significant milestone in the tech giant's global operations. Despite this progress, India's contribution to Apple's worldwide revenue remains relatively modest, primarily due to consumer affordability challenges.
In the fiscal year 2024, Indian manufacturing facilities accounted for 14-15% of Apple's total iPhone output, with industry analysts forecasting this share to increase to 26-30% by 2027. Presently, India serves as Apple's primary iPhone manufacturing alternative to China, which includes Mainland China, Hong Kong, Macau, and Taiwan.
Forecasts suggest that India's iPhone production volumes could align with China's within the next five years. However, achieving comparable revenue contributions to Apple's global operations may take a decade or more.
Despite these challenges, Apple achieved a record $8 billion in revenue from India in FY24, representing a substantial growth. Yet, this figure only accounted for slightly above 2% of Apple's total global revenue of $391 billion. In comparison, Greater China contributed $66.95 billion, making up more than 17% of Apple's revenue. Projections indicate that Apple's revenue from India could reach $11 billion by FY26, following the company's fiscal calendar from October to September.
In the fiscal year 2020, China contributed 14.68% to Apple's total revenue, while India's share stood at 0.66%. Apple's revenue in India encompasses sales across its entire product range, including iPhones, MacBooks, iPads, and services, although local manufacturing figures are not reflected in Apple India's accounts.
Experts highlight that Apple's decision in 2020 to establish manufacturing in India aimed to diversify production amidst US-China tensions and create an export hub, despite recognizing the challenges posed by the lower per capita income in the domestic market.
Apple has positioned itself as a trailblazer in establishing India as a key export center within its global value chain. An official overseeing Apple's progress under the government smartphone PLI scheme mentioned, "Currently, 70% of iPhones are exported, and this percentage is expected to rise to 80-85% as production capacity increases."
While Samsung, Xiaomi, Oppo, and Realme primarily focus on domestic production, Samsung stands out as India's second-largest smartphone exporter after Apple, exporting 30-35% of its locally produced devices.
Notably, India's sizeable market potential is juxtaposed with its lower per capita income, impacting Apple's revenue growth in the region. Despite this, Apple's production in India from April to October 2024 exceeded $9 billion, with exports reaching close to $7 billion, marking a significant milestone for the company in India.
In India's expansive mobile phone market, where iPhones hold a modest 6-7% share of total smartphone sales, there is ample room for Apple to expand its domestic sales and market share. Although competitors dominate the market with Android devices, Apple's focus on iPhones remains strong, with MacBook laptops also performing well in FY24.
While iPhones account for about 52% of Apple's global revenue, in India, sales of iPhones contribute to 65-70% of the company's revenue. With a long path ahead to increase its domestic sales and market share, Apple continues to navigate the unique landscape of India's tech market with optimism and innovation.
