Smartphone major Apple\u2019s manufacturing partners Foxconn (HonHai) and Wistron are set to achieve targets by end of this fiscal year under the production-linked incentive (PLI) scheme, having raised manufacturing of iPhones for India and exports in the past few quarters, people familiar with the matter said.<\/p>\n\n\n\n
Apple\u2019s share of made-in-India iPhones has increased from 17% in 2018 to 76% now, while its share of smartphone exports from the country is now at 5% from zero a couple of years ago, as per Counterpoint Research. \u201cThey (Foxconn and Wistron) were not able to fully utilise the installed capacity last year, but have now picked pace and will achieve this year\u2019s target easily before the stipulated time,\u201d a person in the know told ET. \u201cTheir export run rate is also very good, which is also helping both the Apple\u2019s partners. India-made phones are being sold in markets in Europe as well.\u201d<\/p>\n\n\n\n
Under the handset PLI scheme, foreign companies needed to invest \u20b9250 crore each and raise incremental production to \u20b94,000 crore in the first year to get a 6% direct incentive as cashback.<\/p>\n\n\n\n
Strong Local Demand a Factor<\/strong> \u201cThey need people to come from outside to install machinery but because of travel restrictions and other issues there are some delays. It will take some time for Pegatron to start production,\u201d another person said. Pegatron, which is Apple\u2019s second-largest manufacturer after Foxconn (HonHai), registered its India subsidiary last year and is investing $150 million (about \u20b91,100 crore) in its operations initially.<\/p>\n\n\n\n All three Apple suppliers \u2014 Foxconn, Wistron and Pegatron \u2014 have been approved under the Centre\u2019s production-based scheme, which mandates investment and incremental production targets to provide direct monetary incentives in the next five years. They have committed to manufacture \u20b93.6 trillion worth of iPhones in India in five years, out of which 80% will be exported.<\/p>\n\n\n\n Apple, Wistron, HonHai and Pegatron didn\u2019t respond to ET\u2019s queries.<\/p>\n\n\n\n Tarun Pathak, research director at Counterpoint, expects both Wistron and Foxconn to meet PLI targets this fiscal through March 2022, as there is strong demand for iPhones in India.<\/p>\n\n\n\n 2017 was Apple\u2019s best year when it shipped 3.2 million iPhones. Shah said Apple shipped 3.1 million iPhones in 2020 despite the ongoing pandemic, which shows that smartphone user base is growing fast.<\/p>\n\n\n\n
While Apple\u2019s existing partners continue to grow, its third partner Pegatron\u2019s India manufacturing plans may take more time to start due to pandemic-related hiccups. It had previously finalised plans to train nearly 5,000 people at its maiden factory in the country in Tamil Nadu.<\/p>\n\n\n\n