On January 4, analysts at investment bank Piper Sandler downgraded Apple, the second time in a week. Or affected by the downgrade, Apple's stock price**127% to close at 181$91 shares, the stock price hit a new low in nearly two months. According to the latest statistics, Apple's market value has fallen by nearly $170 billion after entering 2024.
Not so long ago, however, Apple's plan was to produce more than 50 million iPhones a year in India for the next 2-3 years, with tens of millions more planned thereafter. If this plan is realized, India will account for a quarter of global iPhone production and an even larger share by the end of the decade.
Sogou WeChat.
Apple is rapidly emerging in the Indian market, with data showing that India overtook France and Germany at one point last year to become Apple's fifth-largest market for iPhones, contributing nearly 4% of total iPhone sales, up 50% year-on-year. Today, Apple is India's largest exporter of mobile phones.
Apple has been trying to get rid of its dependence on Chinese manufacturing, and India has been attracting attention as a production base to replace China.
The Tata Group became the first
Local Indian companies that have entered the fruit chain
For a long time, India's economic structure has been dominated by agriculture and service industries, and its industry is relatively backward, especially the electronics manufacturing industry, which has long relied on imports and lacks independent innovation and competitiveness. In an effort to change that, Modi began his tenure in 2014 with the "Make in India 1."0" plan. In 2019, after Modi became prime minister for the second time, he proposed "Make in India 20" plan.
Under the implementation of a series of policies and measures, India's electronics manufacturing industry has shown a rapid development momentum, attracting many internationally renowned enterprises and brands, such as Apple, Samsung, Xiaomi, Huawei, Lenovo, Dell, Sony, etc., making India the world's second largest smartphone producer, second only to China, accounting for 16% of global smartphone production.
Sogou WeChat.
Many large multinational companies are considering improving India's position in the top chain, especially Apple, which is the most controversial. Wistron announced last year that its iPhone assembly division in India had been wholly acquired. The other party obtained 100% equity of the local Wistron manufacturing company and paid 1$2.5 billion for production line payments.
It is reported that Wistron has been deeply involved in manufacturing in India since 2006, during which time it has continued to buy land and build factories, and it is reported that Wistron has a factory near Bangalore, India, covering an area of 44 acres, with 8 production lines and tens of thousands of workers, and is one of the main assembly sites for iPhone 12 and iPhone 14.
The sudden takeover is neither Foxconn, Pegatron, an old friend in the industry who has a deep intersection with Apple, nor is it a first-class worker, but a consortium with great Indian capital and advantages - Tata Group. With this acquisition, Tata became the first Indian local company to enter the fruit chain strongly.
Sohu.com.
The Tata Group comprises major IT companies such as Tata Consultancy Services (TCS) and Tata Motors, as well as home appliance retailers. In the "2022 Jiaxing Economic Development Hurun Global 500", with a market capitalization of RMB1,008 billion, it ranked 65th and ranked second among the 20 Indian companies on the list.
In addition, the Tata Group has acquired Wistron India, and Tata has been emphasizing "domestic production" and expanding sales of Apple products in India. Rajev Chandrasekhar, India's Minister of Electronics and Information Technology, also tweeted that "Tata will start manufacturing iPhones in India and abroad".
It is reported that Tata Electronics, Foxconn and Pegatron are expected to start the trial production process of iPhone 17 as early as the second half of 2024, and if implemented, it will also mark the first time that Apple will develop and manufacture ** iPhone outside of China.
Apple continues to increase its share in India
Mobile phone manufacturing is undoubtedly one of the fastest-growing sectors of India's manufacturing industry in recent years. In 2014, there were only 2 mobile phone manufacturers in India, and by 2023, India's mobile phone exports alone exceeded $11 billion. And Apple's rise in India is from retail to manufacturing.
Apple opened its first physical store in Delhi, the capital of India, and Mumbai, a populous city last year, and Apple CEO Tim Cook was a rare presence on the opening day, and held talks with Indian Prime Minister Modi and others.
NetEase.
Compared to Samsung, which was manufactured in 7 countries including Argentina, Vietnam, and China, almost all of Apple's previous hardware products were made in China. However, due to various complex external factors in recent years, Apple has also accelerated its diversification layout, and India has become its main position.
Apple has been producing iPhones in India since 2017, but usually older models. But the shift began when Apple began assembling the iPhone 14 flagship model in India, which also marked the beginning of India's ownership of assembling the latest models of iPhone products.
From 2021 to 2023, in just a few years, the proportion of Apple's iPhone production in India has increased rapidly from 1% to nearly 7%, and its output value in India has exceeded $7 billion, and it is still growing rapidly. Cook also said that Apple sees India not only as a big market, but also as a global manufacturing and innovation hub. To achieve this goal, Apple needs more labor, larger and more powerful foundries, and the competition for Apple by various foundry companies has also shifted to the Indian battlefield, and the dark tide is surging.
Sohu.com.
Foundries in India began to take on a large number of Apple parts assembly work. Although the quality of foundry in India is generally low, India's leading enterprises actively promote the improvement of production technology and management level, and strive to improve product quality. This makes India the new OEM workhorse for Apple and provides it with a good opportunity to grow.
As Apple's "royal foundry", Foxconn has always been regarded as Apple's most competitive OEM king in India, and Foxconn itself is also full of energy and continues to increase its investment in India. However, Foxconn's performance in India is far less smooth than in China, and it can even be said that it is difficult.
This seemingly abundant market is actually full of risks. Xiaomi, which has occupied the first place in the Indian mobile phone market for many years, was frozen by India last year on the grounds of "violating foreign exchange law". In addition, mobile phone manufacturers in India such as OPPO, vivo, Huawei, and ZTE have also received similar treatment.
Foxconn has encountered a lot of policy and employment problems in India, not only has only 35,000 workers for many years, less than a fraction of the number of Foxconn workers in China, but also strikes, fires and other accidents continue, so that Apple's Indian ** chain has suffered a serious crisis.
As a result, Foxconn has increasingly lost Apple's favor, losing a lot of OEM share, and even exclusive orders for high-end mobile phones such as the iPhone 15 Pro have been allocated to competitors Pegatron and Luxshare Precision for the first time.
Make in India is frequent.
Chinese foundries face challenges.
Foxconn's experience in India also provides a wake-up call for more OEMs. Apple's trend of "de-sinicization" has not only brought huge pressure to Chinese foundries, but also made China's top merchants at the low end of the industrial chain with small profit margins. This is mainly because China's leading companies mainly provide parts assembly services, lack of mastery of core technologies and intellectual property protection, and are easily abandoned by Apple.
NetEase.
The Apple Chain is a complex system that involves multiple countries and regions, multiple industries and fields, multiple enterprises and organizations, and multiple policies and market changes. Against this backdrop, it's no surprise that India, another Asian country with a large consumer market and cheap labor, is an emerging market for Apple's attention.
In fact, the phrase "Made in India" has appeared frequently in news reports in recent years. Tesla, Apple and other well-known companies have laid out some production lines in India, which has triggered a lot of discussions about the rise of India's manufacturing industry, but the real "Made in India" is not just about introducing some foreign capital and technology to assemble products.
More importantly, it is necessary to have its own technology and brand to promote the development of the manufacturing industry through independent innovation. Just like the current predicament encountered by China's foundries, it is necessary to change development ideas, strengthen the cultivation of independent R&D and innovation capabilities, enhance the value of product technology, and improve the status and profit margins in the global leading chain. At the same time, we should also actively develop local brands and enhance the market competitiveness of independent brands to reduce dependence on foreign brands.
Source**: China Business News, Core List, China Commercial Towers, Market Value Observation, National Business Daily.