iPhone Production Slows but Steadies in May at ₹15,000 crore
Apple's India vendors produced iPhones worth more than ₹15,000 crore in May, easing slightly from the scorching pace in the preceding two months, but well ahead of the ₹10,000-11,000 crore average in 2024, according to two market research firms and industry data.
Industry experts expect an average ₹15,000 crore monthly rate for the rest of the year now. As of May, Apple's vendors have already made iPhones worth ₹84,000 crore this year — both for domestic sales and exports. That equals the entire domestic consumption of calendar 2024, according to industry data reviewed by ET.
This has been partly driven by a sharp rise in production in March to meet US President Donald Trump's tariff deadline. Apple's monthly run rate of India iPhone production hit a peak of ₹19,630 crore in March, as the Cupertino-based company rushed to ship devices to the US ahead of the start of reciprocal tariffs.
The levy's April deadline has since been pushed to July. Trump has been threatening to impose tariffs on India-made iPhones.
Domestic contract manufacturers produced iPhones worth Rs 16,600 crore in April. Both of Apple's suppliers in India — Foxconn and Tata Electronics — have ramped up production, with the latter gaining share from its Taiwanese rival.
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Tata Electronics, which began assembling iPhones after it acquired the Wistron facility in Karnataka in 2023, now makes 35% of the iPhones manufactured in India, compared with around 30% in 2024. Foxconn has the remaining 65% share, an analysis by the two market trackers showed.
Tata also bought a 60% stake in Taiwanese rival Pegatron's plant in India in January.
Last year, total revenue from iPhone assembly for Tata Electronics and Foxconn was ₹1.38 lakh crore, of which Foxconn accounted for about ₹90,000 crore and Tata Electronics, the remaining ₹48,000 crore, according to analyst data seen by ET. Devices worth ₹84,000 crore were for local sale.
The duo has been the biggest beneficiary of the production linked incentive (PLI) scheme for smartphones.
According to media reports, Tata Electronics has received ₹2,068 crore and Foxconn, ₹2,807 crore, in PLI incentives for FY23 to FY25.
Apple, Tata Electronics and Foxconn did not respond to ET's emails seeking comment.
Smartphones account for nearly 50% of Apple's revenue and the US represents nearly a third of its global smartphone shipments, according to an S&P report on Tuesday. It said India will likely make most of the iPhones shipped to the US by 2026.
The company is on track to significantly increase its manufacturing capacity in India. Foxconn has begun production in a phased manner at its new Bengaluru facility, while Tata Electronics is building another plant in Hosur.
'It's difficult to give the future run rate as it depends on a lot of the India-US and Sino-US trade negotiations,' said one of the industry executives, asking not to be named.
He said local shipments of iPhones are expected to rise by 15% in 2025, from around 11 million units sold in 2024, while India is expected to cater to the majority of US demand by this year itself, going by chief executive Tim Cook's comments. Last month, he said US demand for iPhones in June would be fulfilled in large part from India.
However, this prospect is riddled with uncertainty due to Trump's comments last month, exhorting Cook to make in the US whatever devices it sells in the country or face 25% tariffs.
That may not be a realistic ask, given the costs. 'If Apple really produced an iPhone in a US factory, considering that everything is not in place yet, my estimate is that the price will go up by at least 15-20%, that is, $150-200,' said Neil Shah, vice-president at Counterpoint Research. 'We believe this cost increase will be mostly due to the cost delta of labour, factories' amortised capex and logistics.'
India is expected to be a big winner in smartphone manufacturing in 2025 despite global output forecast to decline by 1% due to tariff impacts and a broader industry slowdown, according to Counterpoint Research.
The firm expects smartphone manufacturing in India to grow in the double digits to reach a record 20% share of global output, fuelled by export demand from Apple and Samsung.
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