Apple Plans to Source iPhone 16 Batteries from India: Signals Strategic Shift in Production
Apple Plans to Source iPhone 16 Batteries from India: Signals Strategic Shift in Production

Apple has reportedly informed its suppliers about a new move regarding the iPhone 16. The tech giant intends to procure batteries for its upcoming iPhone model from factories based in India, according to a report from the Financial Times.

This decision indicates a significant shift in Apple's manufacturing strategy. Analyst Ming-Chi Kuo had previously suggested that Apple might start assembling the iPhone 17 in India, marking the first time the company would undertake iPhone development outside of China.

The New Product Introduction (NPI) process, crucial in bringing a product from concept to mass production, has conventionally been handled by Apple's Chinese manufacturing plants. However, the company seems to be diversifying its manufacturing base by eyeing India for its production requirements.

Approximately 12-14 percent of iPhones distributed globally are already manufactured in India. This decision to produce the iPhone 17 in India is attributed to its simpler design, expected to streamline the development phase and reduce potential complications.

Kuo emphasized that this strategic move could strengthen Apple's relationship with the Indian government, potentially boosting iPhone and other Apple product sales in the Indian market, thereby influencing Apple's growth over the next decade.

Apple has been actively working on diversifying its supply chain and shifting a considerable part of its production away from China. Sources suggest that over the next 4-5 years, Apple aims to amplify its production in India by more than fivefold to approximately $40 billion.

The company has already surpassed the $7 billion production milestone in the previous fiscal year, and government sources indicate plans to escalate production to over $40 billion within the next few years.

Apple's performance in the Indian market has been notably strong, with a 77% year-on-year increase in net profit to Rs2,230 crore in FY 2023 compared to Rs1,263 crore in FY 2022. Similarly, the iPhone maker's net revenue soared by 48% to Rs49,322 crore in the previous financial year, as reported by business intelligence firm Tofler.

Reports from October hinted that Apple was nearing $10 billion in annual revenue from India by the year-end, signifying the company's growing importance in the country's market.

Despite having a relatively smaller user base in India compared to other regions, Apple's sales have been consistently rising, particularly with its phones priced nearly three times higher than the average phone sold in the country. Industry insiders remain optimistic about Apple's future in India, seeing ample room for growth considering the current market trends.
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