Apple to tap Indian auto, aerospace parts makers | Mint

Apple to tap Indian auto, aerospace parts makers

Apple iPhone sales are projected to go up to 9.5 million units this year, according to estimates by the IDC.  (Bloomberg)
Apple iPhone sales are projected to go up to 9.5 million units this year, according to estimates by the IDC. (Bloomberg)

Summary

  • Several suppliers of automotive, aerospace and consumer electronics parts are in the fray

NEW DELHI : Cupertino-based Apple, maker of the iPhone and iPad, is reaching out to several suppliers of automotive, aerospace and consumer electronics parts to explore possible supplier arrangements across multiple product categories, people aware of the matter told Mint. The tech giant wants to meaningfully enhance its production and sourcing activities from India. Apple is holding initial discussions with suppliers who can custom-design and manufacture parts and machinery for original equipment manufacturers (OEMs), as well as those who currently act as contract manufacturers for several global firms, the people mentioned above added.

A couple of suppliers are already investing in new capabilities, machinery and equipment, and may act as potential suppliers to Apple, after an extensive cycle of certification and approvals, Mint has learnt.

The development comes in the backdrop of Apple’s contract manufacturers Foxconn and Tata Electronics (which has recently completed acquisition of Wistron’s iPhone assembly plant near Bengaluru) significantly scaling up production capacity in India as the company looks to diversity its operations and spread out its supply chain, which is heavily concentrated in China.

“They are definitely scouting quality suppliers with different portfolios and parts. They have to find the ecosystem to be good, and pricing and capability to be right to make firm decisions. Right now, various teams in Apple are holding conversations directly with vendors, including at the Tier 2 and Tier 3 level," one of the people with direct knowledge of the discussions said on condition of anonymity.

Apple’s conversations with these suppliers go beyond the iPhone, and include laptops and PCs. However, sources indicate that while Apple will be keen on localizing its Macbooks in India in the backdrop of a strict government stance on reducing laptop imports to foster domestic value addition, such a move could be at least two years away.

An Apple representative declined to comment on Mint’s queries.

Taiwan’s Foxconn, one of Apple’s largest vendors, is constructing a new manufacturing unit in Bengaluru, which is set to come up between April and October next year in various phases. Tata Electronics is also ramping up capacity at its recently-acquired iPhone housing facility.

Moreover, Apple’s intent is to now begin product co-development in India, beginning with the iPhone 16, which means India will participate in all aspects of software and hardware development for the device, one of the sources quoted above said.

Last year, Apple sold 6.5 million iPhones in India. Sales are projected to go up to 9.5 million units this year, according to estimates by the International Data Corporation (IDC), translating to a roughly 6% share of India’s large 144 million-unit smartphone market in 2023.

Apple is set to near $10 billion in annual revenue from India by the end of the year. India revenue estimates, as shared by sector experts with Mint, come on the back of a huge 47.8% growth in sales to 49,321 crore, or $5.9 billion, and strong profitability growth in India, as per data from its filing with the Registrar of Companies (RoC).

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