Apple, Samsung Lead India’s Phone Exports
India's smartphone exports had a great year in 2022 though things could have been better but for poor festive season offtake
In spite of an overall 3% drop in made in India smartphone shipments during 2022 due to an overall decline in demand, the country saw exports of locally manufactured devices touch record levels. They contributed 20% in shipping terms and 30% in value terms, with Apple and Samsung handsets leading the charge.
A report released by Counterpoint Research said global tech giants Apple and Samsung led the export spike witnessed in locally manufactured smartphone shipments at a time when demand in India showed signs of easing. iPhone exports grew 65% in volumes and 165% by value on an year-on-year basis.
This resulted in Apple’s share of locally made smartphones to 25% during the year, up from 12% in 2021, the report said. The reason for the decline in ‘Made in India’ smartphone shipments was attributed to a softening of consumer demand due to macroeconomic headwinds, especially in the second half of the year. The shipments fell 19% YoY in the last quarter due to local demand decline, particularly in the entry-tier and mid-tier segments.
High inventory issues come to the fore
“The high inventory, which has impacted the overall supply of smartphones, is now being felt at the manufacturing level. However, the premiumization trend is benefitting some of the manufacturers. Apple’s electronics manufacturing services partners Foxconn and Wistron were the fastest growing manufacturers in Q4 2022, said Prachir Singh of Counterpoint Research.
“The contract manufacturing landscape is expanding with multiple EMS (electronic manufacturing services) players increasing their output. The PLI (production linked incentive) scheme is one of the major factors driving this trend,” said Singh, senior analyst with the research company, while adding that high inventory, which impacted overall supply, is now being felt at the manufacturing level.
Xiaomi leads the list of local handset makers
The report said Bharat FIH, which manufactures Xiaomi devices emerged as the top local manufacturer for smartphones in 2022, with a 9% share, followed by Dixon Technologies with 8.1% share. Dixon subsidiary, Padget Electronics, which manufactures smartphones for Motorola was the fastest growing EMS player with 70% on-year growth in 2022.
In Q4 2022, Samsung emerged as the top smartphone manufacturer, ahead of OPPO whose manufacturing shipments declined 31% YoY due to inventory issues in the entry-tier segment. Samsung’s manufacturing shipments declined only 7% YoY due to its stable export volume. Among the EMS players, Foxconn Hon Hai led the manufacturing shipments in Q4 2022, followed by Dixon. Dixon remained the top Indian EMS player in Q4 2022 as well. In the feature phone segment, Lava led the ‘Made in India’ shipments with almost 29% share.”
A good year for localization of smartphones
On the overall 2022 performance and Indian government initiatives, Research Director Tarun Pathak said, “Overall, 2022 has been a good year in terms of manufacturing and localization in India. The increasing exports from Apple, Samsung and other OEMs drove the locally manufactured shipments in 2022 and somewhat offset the impact of the local demand decline.
The recent disbursement of PLI incentives from the government as well as other initiatives, both at the central and state levels, has boosted the overall local manufacturing. We are now seeing multiple companies investing in India and expanding their manufacturing base. Also, the component and semiconductor ecosystem is witnessing investment growth due to the government’s continuous efforts.
Pathak was of the view that the government should focus on developing the overall ecosystem and play on India’s strengths like high local demand, developing local talent and improving overall infrastructure. We believe that the government will leverage India’s geopolitical strengths and focus on building favourable export and trade policies to make India a preferred destination for electronics manufacturing.
