India’s role in Apple’s iPhone production has seen impressive growth, positioning the country as a significant manufacturing hub. However, when it comes to contributing to Apple’s global revenue, India is still lagging behind China by a substantial margin. This disparity is due in part to the economic differences between the two nations and consumers’ price sensitivity.
Apple Hits Record Revenue in India, but a Small Share Globally
In fiscal year 2024 (FY24), Apple posted record revenues of $8 billion from India, marking an encouraging milestone. Yet, this figure accounted for just over 2% of Apple’s total global revenue, which reached $391 billion during the same period. By comparison, Greater China—encompassing Mainland China, Hong Kong, Macau, and Taiwan—contributed a significant $66.95 billion, or more than 17% of Apple’s total revenue.
Industry projections are optimistic about India’s growth potential, with forecasts suggesting that revenue from the country could reach $11 billion by FY26. Apple operates on an October-September fiscal year, and this growth trajectory indicates that India is poised to become an increasingly vital part of Apple’s business strategy.
Apple’s Manufacturing Gains: India’s Progress Compared to China
Apple’s shift to diversify its manufacturing operations began in earnest in 2020, prompted by evolving geopolitical tensions between the US and China and the need for a broader supply chain strategy. Since then, India has emerged as the only alternative manufacturing hub for Apple, apart from China.
In FY24, Made-in-India iPhones constituted approximately 14-15% of Apple’s global production. Analysts predict that this figure could grow to between 26-30% by 2027, bringing India closer to matching China’s production output in the next five years. Despite these gains, matching China’s revenue and overall sales contribution is likely to take 10 to 15 more years.
For context, in FY20, China contributed 14.68% of Apple’s total revenue, while India’s share was a mere 0.66%. While Apple’s revenue in India includes not just iPhone sales but also MacBooks, iPads, and other services, the local manufacturing figures are not directly recorded in Apple’s India accounts.
A Limited Domestic Market Due to Low Per Capita Income
One of the primary challenges facing Apple’s revenue growth in India is the low per capita income compared to China. This economic factor restricts consumers’ ability to afford high-end products like iPhones. With China’s per capita income five times higher than that of India, the gap in sales potential becomes evident. China is also Apple’s second-largest market for iPhones after the US, showcasing a stark contrast to India’s current market penetration.
As of April to October 2024, Apple’s production in India surpassed $9 billion, with exports nearing $7 billion, a record achievement for any company operating in the country. However, despite these milestones, iPhone penetration in India remains modest. The device holds only 6-7% of the smartphone market share in the world’s second-largest mobile phone market, with the Android ecosystem, dominated by brands like Samsung, Oppo, Vivo, and Xiaomi, comprising the remaining 94%.
The Future of Apple in India
Industry experts see potential for growth in Apple’s domestic sales. “This gives Apple a long runway to increase the size of its domestic sales and market share,” noted one analyst. While the iPhone dominates Apple’s sales in India, contributing to 65-70% of the company’s total revenue in the country, sales of other Apple products, such as MacBooks, have also performed well during FY24.
Apple’s global revenue heavily relies on iPhone sales, which made up nearly 52% of its total revenue at $201.1 billion. While India’s contribution to that figure is relatively small now, the country’s significant strides in production and exportation, coupled with the growing interest in premium devices, provide a promising outlook for the future.
A Competitive Edge in Exports
Apple’s commitment to India has positioned the country as an export hub, with 70% of iPhones manufactured in India currently destined for international markets. This proportion is expected to increase to 80-85% as production capacity expands. This trend is distinct from other smartphone manufacturers in India, such as South Korea’s Samsung and Chinese firms like Xiaomi, Oppo, and Realme. While these companies primarily cater to the domestic market, Samsung, India’s second-largest smartphone exporter, sends 30-35% of its production abroad.
