Apple’s India foray will bolster India’s smartphones segment
Its increased production in the county reflects the local market’s growing significance
India has and always did have a lot to offer Apple: a young population, education, a growing middle class and consumer market, and relatively low employment costs. Apple has also worked extremely hard with the country’s governments to navigate the desire to protect its own economy while opening up to manufacturing.
Apple Inc. has significantly increased its iPhone production in India as part of a deliberate shift away from China. The company has exceeded the $seven billion milestone in the previous fiscal, tripling its output in the country.
Apple’s increased production in India reflects the growing significance of the local market. In the fiscal year that concluded in March, the business shipped $five billion worth of iPhones, more than quadrupling its previous production. Furthermore, assuming the aggressive development rate of its supplier is sustained, the company may produce 25% of all its iPhones in India by 2025.
The iPhone maker’s expansion in India also creates job opportunities and contributes to the country’s economic growth. Local companies like Foxconn Technology Group and Pegatron Corp are partnering with the iPhone maker, generating revenue and employment in the region.
Apple must protect its manufacturing base and is deeply involved in doing so, partly in response to the pandemic. India is expected to assemble up to half of all Apple’s iPhones by 2027, which is now just under five per cent. The forecast follows a JP Morgan prediction that India will manufacture 25% of iPhones sold worldwide by 2025.
Apple’s key partner, Foxconn, is spending hundreds of millions of dollars to promote business in India. iPhone manufacturing has already created 150,000 jobs in the country, of which 50,000 are in manufacturing. Pegatron, Wistron and component makers Avary, Foxlink, Salcomp and others are already in India.
Of course, all this manufacturing will require massive investment in energy supply. Tata has its own solar energy production plants in Tamil Nadu and it once again seems inevitable Apple will seek to invest in climate-friendly energy for use across its India-based supply chain. Tata has announced plans to open 100 Apple stores in India.
Smartphones are a particular subset of mobile phones that offer exceptionally good hardware performance and software services. They possess all the standard features of feature phones, including calling and messaging, along with a variety of multimedia options, including smart applications, music, cameras, and gaming options.
Additionally, these items come with several sensors and can handle a wide range of wireless communication protocols, including Wi-Fi, Bluetooth, and satellite navigation.
The ease with which users can manage applications, photos, galleries, and documents has increased smartphone dependence. The smartphones market growth is anticipated to be driven by the rising consumer interest in music, games, navigational tools for travellers, entertainment, social media, and personalisation. They are gradually emerging as a replacement for bulky laptops and desk-hogging computers.
In addition, the industry is developing as a result of rising customer demand for goods that support contactless payments. Smartphones eliminate the need for card swipes and manual entry, aid to lower human error, and offer a more seamless buying experience.
Due to the rising disposable incomes of consumers and an expanding working population, particularly in emerging economies, the demand for cell phones has expanded significantly. During the projected period, this is anticipated to accelerate the expansion of the industry.
Real market recovery is not expected to occur until 2024, when IDC expects 5.9% year-over-year growth followed by low single-digit growth leading to a five-year compound annual growth rate (CAGR) of 2.6%.
Revenue in the smartphones segment amounts to $41.73bn in 2023. The market is expected to grow annually by 7.20% (CAGR 2023-2028). In global comparison, most revenue is generated in China ($119.20bn in 2023). In relation to total population figures, per person revenues of $29.39 are generated in 2023. In the Smartphones segment, the volume is expected to amount to 234.50m pieces by 2028. It is expected to show a volume growth of 5.9% in 2024.
5G continues to grow and will account for 62% of smartphones shipped worldwide in 2023, rising to 83% by 2027. Market momentum also continues to build around foldable phones as the segment is expected to grow to nearly 22 million units this year – a 50% increase while the overall market contracts.
Revenue in the Smartphones segment amounts to $41.73bn in 2023. The market is projected to grow annually by 7.20% (CAGR 2023-2028).
In the Smartphones segment, volume is expected to amount to 234.50m pieces by 2028. Overall, it could show a volume growth of 5.9% next year.
The average volume per person in the Smartphones segment is expected to amount to 0.13 pieces this year.