Apple started assembling the iPhone 14 in India last week – the first time it has done so in months since the launch of the new model. The move is part of the company’s plans to increase production, a process that has been achieved through the prolonged lockdown in Chinese cities and tensions between Washington and Beijing. While analysts hope that this will strengthen India’s position as a premium mobile phone supplier, they also say that the process will take time because it has infrastructure challenges and China has an important point. Mint explains in five columns what it will take for India to compete with China’s strong position.

1. A long way

Of course, India is gaining from China’s loss. Taiwanese electronics suppliers in India—Foxconn, Pegatron, and Wistron—are looking to increase production of iPhones made in India. Indian companies such as Tata Group and Vedanta are reportedly in talks for joint ventures to manufacture iPhones in India. It is also reported that Google is looking to move some of its Pixel phones to India.

The country’s large workforce and low labor costs make it an attractive destination outside of China, global brokerage JP Morgan said in a report dated September 21. However, data shows that India has a long way to go before it can claim the title of the world’s largest iPhone manufacturing hub. According to JP Morgan estimates, around 25% of total iPhone manufacturing capacity will come from India by 2025, up from 6% in 2022. While these figures are encouraging for the Indian industry, it is still the country will be less than 75% of China. contribution.

2. The priority of China

India and Vietnam, which are behind China as the second and third largest producers of smartphones in the world, have benefited the most from Apple’s restructuring plan, said the Counterpoint Research report. However, some facts will not change anytime soon. China has invested heavily in strengthening its domestic supply chain in the electronics industry over the years, and the sector has become an important factor in helping its economy grow at a remarkable pace and ensure and the country as a power generation center in the world. As Apple leads the world’s largest mobile phone segment (with 57% of sales in the June quarter), China also benefits greatly from being an iPhone hub.

Also, the companies that dominate the Indian mobile phone market are mostly Chinese, and Apple’s market share in India is very low (4%) compared to China (23%). The incentive for Apple to maintain its roots in China is even greater.

3. Business competition

Despite its weak position compared to China, the overall Indian mobile phone industry is well positioned to compete with other Asian countries through its market share. A good business environment combined with the ability to trade at low prices helps the market to be more attractive. India is ranked 37th in the Institute for Management Development’s Global Competitiveness Index in 2022, registering the best development among Asian countries. In terms of “professional efficiency”, a sub-scale of the index, India ranks second among emerging markets, after China. Out of all 63 countries on the list, India ranks 23 , where she got nine positions. only six places since 2018, and the country is below the 15th place of China.

Quality standards of Indian business

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Quality standards of Indian business

4. PLI deployment?

Earlier this year, the Ministry of Electronics and Information Technology along with the Cellular and Electronics Association of India released a vision report to make the electronics industry a $300 billion industry by 2026. relying heavily on the jump in cell phone production to $120 billion from $30. billion, which was pushed by the production partnership development (PLI) system. But there are some real facts that should be told, which also points to the existence of China. The PLI program is seen as a way to attract top artists to perform in India. However, last month, former RBI governor, Raghuram Rajan, argued that the program is against the interests of Indian consumers, and he said that when profitable products are exported to foreign countries, it causes According to the manufacturers, Indian consumers are reluctant to pay high prices due to taxes. A Counterpoint report also shows that Chinese companies gained market share even though domestic companies that benefited from the PLI program lost market share between April-June 2021 and April-June 2022.

5. The truth of the price

Finally, a nice print. Can a Made in India iPhone Save Costs for Indian Consumers? Apple has started assembling the iPhone 14 in India, but most of the components in the phone will still be imported and attract customs duties. This, coupled with high taxes, could make the iPhone’s price as high in India as it has been with older models assembled here, analysts feel.

China will still retain the high-end devices and devices that have supported Apple’s years of experience in that country. Navkendar Singh, vice president of market intelligence firm, IDC, said, “For the China-One strategy, India is the most worthy candidate, but there are red tapes in infrastructure and so on.”

In the long run, India will hope that its efforts to reduce its dependence on imports will not only benefit the country’s smartphone market, but also lower prices.

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