Apple’s strong performance in India can be attributed to a significant increase in production facilitated by its contract manufacturers: Foxconn, Wistron, and Pegatron.

Apple has surpassed Samsung in smartphone export volumes from India for the first time. The iPhone maker shipped 49 percent of the country’s total 12 million smartphone shipments, while Samsung accounted for 45 percent in the June quarter, a newspaper report has said.

More importantly, the shift highlights Apple’s rapid expansion of local manufacturing in India. Apple manufactures iPhones in India through contract manufacturers and has witnessed significant growth in export volumes over the past year. Its share of exports rose from 9 percent of roughly 8 million smartphones in Q2 2022 to almost half the total smartphone exports in Q2 2023, the Economic Times reported, citing industry executives.

Moneycontrol couldn’t verify the report independently.

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Apple’s impressive performance in India can be attributed to a significant increase in production facilitated by its contract manufacturers: Foxconn, Wistron, and Pegatron. This ramp-up in production began in the second half of 2022, coinciding with the manufacturing of iPhone 14 and previous models. The focus has been to meet the rising demand within the Indian market as well as to enhance export capabilities.

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Furthermore, all three contract manufacturers—Foxconn, Wistron, and Pegatron—are beneficiaries of the Indian government’s production-linked incentive scheme for smartphone manufacturing. This has played a crucial role in encouraging and boosting Apple’s manufacturing operations in the country, the report said.

Wistron and Foxconn have submitted applications for incentives after meeting the required incremental production targets. Foxconn has already initiated the production of the latest iPhone 15 at its Chennai facility, reinforcing Apple’s aspiration to transform India into an export hub for iPhones. By diversifying its production and leveraging India’s manufacturing capabilities, Apple aims to cut its dependency on China, particularly in light of ongoing geopolitical tensions and to position India as a significant manufacturing and export hub for iPhones, which are one of the company’s highest selling products worldwide.

The fall in exports by Samsung and other Android smartphone brands from India can be attributed to a global downturn in demand, which has impacted Android smartphone brands. Plus, the slump has likely resulted in reduced export volumes for these brands in India.

“As the first quarter of the calendar year coincides with the last quarter of the financial year, there is also a general rise in exports for brands to meet their year-end targets to claim incentives under the PLI scheme. This is also one of the factors behind higher exports in the first quarter, as compared to the second quarter,” The Daily quoted an industry executive as saying.

The drop in Samsung’s share of export volumes from India, from a dominating 84 percent in Q2 2022 to 45 percent in Q2 2023, shows a major shift in the dynamics of the smartphone export market. It could be attributed to various factors such as increased competition, changes in consumer preferences, evolving market trends, and a global downturn in demand for Android smartphones.