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Home Electronics: Technology, News & Trends Strategic Move: Apple Suppliers Set to Source iPhone 16 Batteries from India

Strategic Move: Apple Suppliers Set to Source iPhone 16 Batteries from India

India made iphone
India is the Fastest-Growing Market for Apple

In an effort to diversify its supply chain and strengthen its influence in the emerging Indian market, Apple has instructed its component suppliers to source batteries for the upcoming iPhone 16 from India. This strategic decision aligns with broader efforts to reduce dependence on the Chinese supply chain and leverage initiatives by the Indian government to boost local manufacturing.

One of the key suppliers involved in this shift is TDK, a major battery supplier for Apple, which is constructing a massive 180-acre factory in Manesar, Haryana, India. The factory aims to manufacture iPhone batteries in India, contributing to the deepening of the Indian electronic manufacturing ecosystem.

This development has earned praise from Rajeev Chandrasekhar, India’s Minister of State for Electronics and Information Technology, who commended Apple, TDK, and local officials for achieving the government’s manufacturing goals.

“PM Modi’s visionary PLI scheme has shifted the mobile manufacturing ecosystem to India, yet another significant win for him. Apple’s primary battery supplier, TDK, is setting up a 180-acre factory in Manesar, Haryana, to produce batteries for iPhones manufactured in India. This move will create thousands of new jobs and increase domestic value addition,” he stated.

Apple is pushing other battery manufacturers to establish or expand production in India, reflecting a broader trend. The tech giant is actively seeking to shift more iPhone battery production to India, indicating confidence in the country’s manufacturing capabilities.

Large Scale Investment in Indian Manufacturing Industry

Apple’s largest supplier, Foxconn, has also committed to investing over $1.5 billion in India to establish a new production facility. This underscores Apple’s commitment to expanding its manufacturing footprint and solidifying its position in India as a key growth frontier, following China.

According to Apple analyst Ming-Chi Kuo, as reported by Reuters, an estimated 12-14% of iPhone production in 2023 will take place in India, with expectations that this proportion could increase to 25% the following year. Apple’s market share in India has steadily grown to 6% of the smartphone market, a significant increase from 2% four years ago. The move to shift production to India reflects Apple’s recognition of the country’s importance in its global strategy.

Iphone battery

India, the Fastest-Growing Market for Apple

Despite challenges, Apple is spearheading a trend of “premiumization” in India. The first quarter of 2023 saw a staggering 50% year-on-year growth, according to data from Counterpoint Research. The premium status of the iPhone resonates with consumers seeking an exceptional experience through financing plans offered by mobile carriers.

In May of last year, Apple opened its first flagship retail store in Mumbai, demonstrating its commitment to the Indian market, with Tim Cook being hailed as a local hero.

“There are a lot of people entering the middle class, and I really think that India is at a point of inflection,” Cook expressed to analysts in a earnings call six months ago.

The growing middle class in India is changing the dynamics, contributing to Apple’s positive development in the country. India’s immense potential as a high-end smartphone market is evident, although pricing remains a barrier for many. However, the iPhone has become the desired smartphone for people in India.

Nevertheless, Apple’s expansion plans in India face a hurdle with the potential regulation of a mandatory universal charging port, similar to regulations in the European Union. The company is concerned that compliance with these regulations may impact its local production goals. The EU’s charging port regulations are set to take effect in December 2024, while India proposed compliance by June 2025. Apple is lobbying for exemptions or delays, citing the need for a natural transition period and emphasizing the impracticality of altering the design of existing products.

As Apple navigates the regulatory environment and expands its manufacturing capabilities in India, the tech giant is poised to strengthen its foothold in the Indian market, where future growth prospects are extensive. Shifting the battery production strategy to India enables diversification of Apple’s supply chain and aligns with the Indian government’s vision to support domestic manufacturing and create employment opportunities.

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