Tech giant Apple, which is not just manufacturing but exporting iPhones from India, has no plans to assemble iPads and MacBooks in the country in the near term. Sources close to the company, who are also familiar with the developments, told Business Today that manufacturing iPad and MacBooks in India is not on the roadmap for the next two-three years. Apple has leveraged the government’s Production Linked Incentive (PLI) scheme for smartphone manufacturing. Earlier this year, there was speculation about Apple planning to apply for the IT hardware PLI (which the government plans to revise) through its contract manufacturers. While the company did not respond to Business Today’s query, here’s why Apple isn’t considering manufacturing iPads and MacBooks in India yet.
iPhone Pro, not iPad:
Apple has been manufacturing some of the iPhones, including the latest iPhone 14, in India. However, it still doesn’t manufacture its top-of-the-line ‘Pro’ models here. Primarily, because the manufacturing process of the iPhone 14 and iPhone 14 Pro models isn’t the same. Apple’s contract manufacturers will have to invest in different equipment and a shift in technology, which could take time. Sources familiar with the matter told Business Today, “If Apple is really looking at expanding its manufacturing base in India, the natural progression will be to make the iPhone Pro model locally, instead of jumping to an all-new category such as iPad or Macbook,” confirmed industry sources.
Windows-dominated India market:
Although the adoption of Mac hardware and iPads has increased in India, it continues to be predominantly a Windows-dominated market with low- and mid-end gadgets being more popular. The Indian desktop and laptop market is dominated by Windows-powered machines with HP, Lenovo, Dell, Asus and Acer as the top five brands accounting for over 83% market share for the calendar year 2022. However, if the tablet shipments are included, Apple was on the fifth spot with an 8.1% market share for 2022. Also, the demand from India isn’t compelling enough for Apple to ask its contract manufacturers to invest in manufacturing for iPads and Macbooks in India as yet.
Declining PC demand:
The fear of recession and slowdown, along with rising inflation, has resulted in consumers holding on to their new purchases and upgrades, both in smartphones and in the PC space. This has resulted in the declining demand for tablets and PCs, globally, as well as in India.
According to research firm Canalys, the Indian PC market (which includes desktops, notebooks and tablets) had suffered a major decline of 22% year on year, with 4.1 million units shipped in the October- December quarter of 2022. This was mostly due to a steep fall in notebook shipments, which were down 31% to 2.3 million units. There was a decline in the desktop shipments as well, as it fell by 5% to 695,000 units, while tablet shipments decreased by 7% to 1.2 million units. Contrary to the fourth quarter shipments, overall 2022 was a successful year for the industry in India, with shipments up 5% over 2021. While notebook shipments fell 7% to 11 million units, desktop and tablet shipments increased significantly by 37% and 21% to 3.2 million and 5.4 million units respectively in 2022.
However, the growth is unlikely to continue in 2023. Just like the global markets, Canalys anticipates that the PC and tablet shipments in India will fall by 6% in 2023, to 18 million units.
Even the current manufacturing capacity for MacBooks and iPads is in sync with the demand for these products globally. In addition, all the Apple partners are already scaling up their production. And given the declining demand for PC and tablets globally, it does not make sense for Apple to shift its production to India.
“Apple’s Make in India focus has contributed significant momentum for iPhones. I believe Apple is prudent with its focus on iPhones for now. It will potentially start manufacturing Macs and iPads in the next two-three years in India. Even Apple’s manufacturing partner, BYD set shop in Vietnam in late 2022,” says Prabhu Ram, Head of Industry Intelligence Group (IIG) at CyberMedia Research (CMR).
Currently, Apple MacBooks and iPads are primarily manufactured in China and Taiwan, with some MacBook Pro models being made in the USA as well.
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