Experts say 2021 to be Apple’s best year for iPhone business in India

2021 could prove to be the best year for Apple in India for its iPhone business, which is likely to be driven by its growing “mature smartphone user base” and the company’s increasing focus on local assembling.

Apple is currently preparing to kick off the production of its 5G-ready iPhone 12 smartphone through Foxconn in the country; the company confirmed last week.

Analysts at Counterpoint Research said that with the locally made iPhone 12 and other older generation iPhone models, Apple is likely to post record sales of 3.5 million units in 2021. Apple crossed 3.2 million iPhone sales to acquire a 2.4% market share in the 2020 calendar year in India.

Notably, 2017 was Apple’s best year where it shipped 3.2 million iPhones. Apple recently said that it doubled its Indian business in the last quarter of 2020, driven by a strong demand for its iPhones and other products like iPad, Airpods and Macbooks.

“India is one of those, where our share is quite low, it did improve from the year-ago quarter, our business roughly doubled over that period of time, so we feel very good about the trajectory,” Apple chief executive officer Tim Cook had in January earnings call.

Apple is now quickly shifting a part of its production from China for domestic demand and export purposes with the help of India’s recently introduced production-linked incentive (PLI) scheme.

Neil Shah, vice president at Counterpoint Technology Market Research, said that the local assembly of iPhones would help Apple bring down high cost due to import duty and taxes. “Apple’s 2020 sales amid the pandemic showed that the mature smartphone user base is growing and those buying their second or third phones are opting for iPhones,” he told the Economic Times.

iPhone prices are higher in India than in any other country due to the import duty imposed by the Indian government and currency depreciation. However, two of Apple’s manufacturing partners – Foxconn and Wistron – are preparing to ramp up their local capabilities under the PLI scheme. Pegatron is yet to start manufacturing in the country and is currently in talks with various state governments to establish its manufacturing plant.

Apple, which started local manufacturing in 2017 with iPhone SE, is currently making its iPhone SE 2020, iPhone XR and iPhone 11 in India through contract partners Foxconn and Wistron.

Experts believe that Apple is gradually bringing its high-end value chain to India as it makes 5G-enabled iPhones.

Apple is also preparing to open its offline retail stores in India to drive the growth further, having already launched its online store.

Apple, which makes a bulk of its iPads in China, is reportedly planning to shift tablet production to markets such as India and Vietnam. Additionally, it is looking to start the production of Airpods and Macbooks in the country.

Apple’s global partners have already begun the process to establish operations in India. BYD Electronics (for iPads), Luxshare Precision Industry (for AirPods), Quanta Computer (for MacBooks) and AT&S and Avary Holding (Shenzhen) (for PCBs) have reportedly registered their companies in India

As per media reports, critical suppliers of Foxconn, Wistron and Pegatron are planning to participate in the second round of applications that India will soon invite under the PLI scheme for electronic component makers. Disruptive Asia