Apple's new products may soon be designed in India
What's the story
Apple has finally set up its first direct subsidiary in India - Apple Operations India.
The new company will be dedicated to research, design, testing, and supporting third-party manufacturers.
The development marks Apple's commitment to expanding its operational footprint in the country beyond just assembly and sales.
Operational plans
Apple Operations India's proposed activities and support
The regulatory filing by Apple Operations India details its proposed activities.
These include procuring engineering equipment, leasing facilities, hiring engineers for hardware development, and offering failure analysis services to group companies.
Apple Inc has issued 'a letter of comfort,' assuring operational and financial support for the foreseeable future to this new entity.
Expansion strategy
Apple's existing presence and future plans in India
Currently, Apple's sales and marketing entity in India is part of its European operations, with Ireland-based Apple Operations International owning Apple India.
Apple products are manufactured in the country through outsourcing.
The new subsidiary will support third-party manufacturers and contractors by providing hardware, software, and other services.
This marks a significant expansion of the tech giant's presence in the Indian market.
Financial details
Apple Operations India's investment and assets in India
Apple Operations India has invested heavily in the country, with ₹38.2 crore in capital work-in-progress and ₹36.8 crore in fixed assets.
Mohit Yadav, an analyst and founder of business intelligence firm AltInfo, said that although the subsidiary is still in the investment phase, its emphasis on manufacturing support, procurement management, and R&D capabilities indicates Apple's strategic intent to strengthen its India presence beyond assembly and sales.
Market competition
Apple's R&D expansion amid global tech brands
Apple's decision to set up an R&D unit in India comes at a time when leading global electronic brands such as Samsung, LG, and Sony also have R&D operations in the country.
However, these are mostly restricted to hardware localization of products and software development for global launches.
Tarun Pathak, director of research at market tracker Counterpoint Research, said Apple's decision is more about leveraging India's technological skills than due to US-China relations.
Market impact
Apple's strong app developer base and sales record in India
Apple has a strong app developer base in India, with over 17,000 developers and a developer center in Bengaluru.
The company has been breaking new sales records every quarter in the country, something that CEO Tim Cook has acknowledged during the company's earnings calls for years.
Apple currently runs two company-owned stores in India and plans to soon open four more.
Production growth
Apple's increased manufacturing operations and production in India
Through three partners, Apple has expanded its manufacturing in the country, becoming the country's largest electronics exporter.
India accounts for roughly 14% of Apple's overall production, according to the latest Economic Survey.
The tech giant started assembling iPhones in India in 2017 via Wistron and ramped up local production post-COVID-19 with Foxconn, Tata Electronics (which acquired the Wistron plant), and Pegatron doing contract manufacturing.