Who is better at making phones, India or China?

Haven’t iPhones been made in India before?

While iPhones were first made in India in May 2017, this is the first time that India’s assembly lines made the latest iPhone ahead of its launch. Brands such as Apple typically get finished products at mass scale weeks ahead of launch, which is why manufacturers in China start making upcoming iPhones before launch. India’s plants were so far making new phones behind schedule. But this year, Foxconn’s Chennai plant started making the iPhone 15 last month itself. This suggests India is now serving as a parallel manufacturing market alongside China—which has been a long-term local manufacturing goal.

Has India caught up with China?

Not entirely. Industry insiders say only the base iPhone 15 was made locally. Pro iPhones are still assembled away from India. The primary reason for this is supply chains; for devices such as Pro iPhone, Apple already has established partner-vendors in China operating at a certain balance of cost, scale, and availability. India is a relative newcomer. While the advent of the likes of Foxconn has attracted many such firms, industry experts say that the scale and seamlessness of supply chain operations isn’t the same as that of China. Getting there will take at least another two years for India.

Do we make smartphones or assemble them?

Manufacturers continue to import key parts, such as cameras, display units and chips, and assemble the phones here. India, therefore, is a high-level assembly destination. China, with established fabs (plants that make chips and displays), has the upper hand here. However, India is looking to close this gap in a decade through its production-linked incentives.

Does workforce skill play a role here?

Samsung made its latest foldable phones in India. But smartphone manufacturing is largely automated. Insiders say India’s workforce can be—and is being—upskilled to be part of more sophisticated assembly lines. One reason why Apple is not making its Pro iPhones in India is the value of the supply chain—estimates peg the share of Pro iPhones at less than one-fifth of all iPhone sales here. Unless this share grows, Apple can keep importing them for the local market, without realigning its supply chains.

Why aren’t these iPhones cheaper?

Overall, India isn’t a cheaper manufacturing destination than China. But Apple’s iPhone sales continue to grow, and could jump by nearly 40% this year. Experts say that this means Apple doesn’t really need to lower prices—which may also help their perceived brand halo. However, with growing disparity between pricing in India versus the likes of the US and UAE (where iPhones are cheaper), Apple may have to revise its prices in the next two years, once the iPhone breaches 10 million units of annual shipments.