Apple's key partners join India's PLI scheme

Apple's plans to move production of devices away from China received a boost with partners entering India through the government's Production-Linked Scheme.

Gagandeep Kaur, Contributing Editor

November 20, 2020

3 Min Read
Apple's key partners join India's PLI scheme

Global smartphone major, Apple's plans to move the production of devices away from China received a major upswing with several partners entering India through the Government's Production-Linked Scheme (PLI).

"During COVID-19, about nine of 11 component-makers of Apple have shifted their units from China to India," said Union IT and Communications Minister Ravi Shankar Prasad at an industry event earlier today.

Figure 1: Merging markets: Bringing iPhone production to India could boost sales in the country. (Source: Apple) Merging markets: Bringing iPhone production to India could boost sales in the country. (Source: Apple)

Apple hopes to move a part of its manufacturing from China to India to reduce its dependence on the country.

These nine partners include Pegatron, Wistron, Cheng Uei Precision and Foxconn, among others.

Pay it down

According to media reports, Foxconn has applied to invest around INR40 billion ($539.5 million), while Wistron and Pegatron will be investing INR13,000 mn ($175.3 mn) and INR12,000 mn ($161.8 mn), respectively, under the PLI scheme.

Cheng Uei, Apple's cable and connector supplier, is likely to start mass production soon in the state of Tamil Nadu.

Similarly, Pegatron, Apple's second-largest contract manufacturer, is also likely to set up a manufacturing unit in Tamil Nadu.

However, Apple has suspended all new business with Pegatron as it was found to be violating the supplier code of conduct. The company needs to complete all corrective actions before it starts to receive new business from Apple.

Media reports suggest that Pegatron will participate in PLI from April 1, 2021, with the issues with Apple likely resolved.

Build it up

Foxconn already has a manufacturing unit at Sriperumbudur. The company is planning to invest INR70,000 million ($943 million) over the next three years to expand this unit's capacity.

Meanwhile Wistron plans to double the existing capacity of 200,000 units per year. This will lead to the hiring of additional 10,000 workers.

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The PLI scheme is designed to help India emerge as a smartphone manufacturing destination. The scheme gives an incentive of 4% and 6% of incremental sales over five years to firms manufacturing mobile devices and electronic components.

Apple started assembling iPhones in India in 2017 through Wistron, followed by Foxconn last year. Local manufacturing helps Apple increase its market share in India by reducing the price of several iPhone models, including iPhone XR and iPhone 11.

The company further ramped up its presence in the country by launching an online store earlier this year.

According to Tim Cook, Apple's chief executive, the company's sales in India recorded a historic high in the September 2020 quarter.

Boosting local manufacturing will further help the company increase market share in the country. It competes with Samsung and OnePlus, among others in India's premium smartphone segment.

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— Gagandeep Kaur, contributing editor, special to Light Reading

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About the Author(s)

Gagandeep Kaur

Contributing Editor

With more than a decade of experience, Gagandeep Kaur Sodhi has worked for the most prominent Indian communications industry publications including Dataquest, Business Standard, The Times of India, and Voice&Data, as well as for Light Reading. Delhi-based Kaur, who has knowledge of and covers a broad range of telecom industry developments, regularly interacts with the senior management of companies in India's telecom sector and has been directly responsible for delegate and speaker acquisition for prominent events such as Mobile Broadband Summit, 4G World India, and Next Generation Packet Transport Network.

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