An increasing number of Made-in-India smartphones are finding their way to international markets, marking a significant shift in the dynamics of this fiercely competitive sector. Interestingly, Apple has achieved a historic milestone by surpassing Samsung in terms of smartphone exports from India’s vibrant market.
For the very first time, Apple accounted for an outstanding 49% of the total 12 million smartphones exported from India during Q2 2023. In contrast, Samsung, its long-standing rival, secured a substantial 45% share of these exports from the country. This shift isn’t just about statistics; it’s a story of strategic acumen, adaptability, and manufacturing excellence. The dramatic surge in Apple’s contribution to smartphone export volumes from India adds an even more captivating layer to this story. In the span of just one year between Q2 2022 and Q2 2023, the iPhone maker’s export share skyrocketed from a modest 9% to a staggering 49%.
In sharp contrast, Samsung’s share of the total smartphone exports from India plummeted drastically, down from a commanding 84% in Q2 2022 to 45% in Q2 2023. This decline in exports can be attributed to various factors, including intensified competition among Android OEMs, shifts in consumer preferences, evolving market trends, and a worldwide decline in demand for Android smartphones.
In addition to leading in export volume, Apple has also emerged as the foremost smartphone exporter from India in terms of value during the first half of 2023. This achievement is primarily attributed to Apple’s strong presence in the premium and ultra-premium segments of the smartphone market, while Samsung offers a range of devices across various price categories.
What’s Behind India’s Booming Mobile Export Growth?
India finds itself on the verge of a manufacturing renaissance. A combination of domestic trade and industrial policies, coupled with increasing vulnerabilities in global supply chains, has led global electronics companies to consider India a pivotal destination for diversifying their manufacturing operations and expanding the sources of their exports.
Apple’s remarkable success in India can be traced back to a substantial increase in iPhone production facilitated by its contract manufacturers, including Foxconn and Pegatron. In September 2022, Foxconn started manufacturing/assembling the iPhone 14 models in the country. In August 2023, the most recent iPhone 15 production was underway at Foxconn’s facility in Tamil Nadu. Additionally, the company has outlined plans to commence production of the iPhone 15 Plus sometime between October and December 2023.
To capitalize on the increasing popularity and rising demand for iPhones among Indians – despite being tagged as the “most expensive” – Apple is leaving no stone unturned to secure a sizable share of India’s smartphone market. On the other hand, the Cupertino giant is actively exploring strategies to reduce its reliance on China, making swift moves to shift a considerable iPhone manufacturing operations to India.
It’s worth highlighting that Apple’s contract manufacturers – Foxconn, Wistron, and Pegatron – have benefited from the Indian government’s production-linked incentive (PLI) scheme for smartphone manufacturing in the country. This government-backed initiative has played a pivotal role in incentivizing and amplifying Apple’s manufacturing endeavours within the country.
The Indian Government unveiled its ambitious Production Linked Incentive (PLI) Scheme on October 6, 2020, with a specific focus on the mobile phone industry. This scheme provides incentives ranging from 4% to 6% linked to incremental sales over a 5-year period, aiming to boost local production significantly. The approved companies under this scheme are estimated to produce mobile phones worth over Rs 10.5 lakh crore in the next 5 years. Notably, a substantial 60% of this production is earmarked for exports.
One noteworthy outcome of this initiative is the expected increase in Domestic Value Addition, which is projected to rise from the current range of 15%-20% to a solid 35-40% for mobile phones.
India Smartphone Exports 2022-2023
India’s mobile phone industry has witnessed remarkable growth in both production and exports over the past five years. In the fiscal year 2018-19, the country produced Rs 1,81,000 crore worth of mobile phones. However, only a small fraction, 6.3% to be precise, with a total worth of Rs 11,396 crore, was exported from India.
Fast forward to the fiscal year 2022-23, and the landscape has significantly transformed. India’s mobile phone production has surged to an impressive Rs 3,50,000 crore. 25.7% of these mobile phones, valued at Rs 90,000 crore, were exported from the country.
The trend has a direct impact on the smartphone exports from India.
Over the past year, India’s smartphone export sector has experienced a slight ebb and flow. In Q1 2022, the country successfully exported approximately 10 million made-in-India smartphones, which declined a noticeable 20% QoQ in the subsequent quarter, resulting in exports totalling 8 million units. However, the exports from India shot up again with a notable growth of 30% YoY and 50% YoY in Q1 2023 and Q2 2023, respectively, reaching volumes of 13 million smartphones.
So, what’s the secret sauce behind this intriguing export pattern? Well, it’s all about timing.
The first quarter of the calendar year aligns with the last quarter of the financial year in India. During this period (Jan-March), smartphone brands rev up their export efforts to meet year-end targets and unlock lucrative incentives under the PLI scheme. As a result, the first quarter, being the final fiscal quarter, records a soaring spike in export figures, while the second quarter plays catch-up – a trend noted by an industry insider cited in The Daily.
