Apple rings in $10 billion in iPhone production freight on board

This equates to a $15 billion market value, with 70% exported

Apple Inc has reached a milestone, with its iPhone production’s freight on board (FOB) value hitting $10 billion during the first seven months (April–October) of 2024-25 (FY25). This marks a 37 per cent increase over the $7.3 billion FOB value from the same period in 2023-24 (FY24).

 

The FOB value represents the price at which the product leaves the factory gate.

 

The estimated market value of this $10 billion FOB production is $15 billion, taking into account sales and distribution, marketing, margins, and logistics costs. Of this total, nearly 70 per cent — or $7 billion — has been exported, while the remaining $3 billion serves the domestic market. 

October marked a historic moment for Apple, as iPhone production crossed $2 billion within a single month for the first time.

A query sent to an Apple Inc spokesperson went unanswered until the time of going to press. 

Apple began iPhone production in India at scale in 2021, following the introduction of the smartphone production-linked incentive (PLI) scheme. Three of its Taiwanese vendors — Foxconn, Pegatron, and Wistron (now Tata Electronics) — set up mega factories in India to support this effort. Data submitted by the firms under the PLI scheme reveals that Foxconn’s Chennai factory accounted for 56 per cent of the $10 billion production.

 

Foxconn employs nearly 42,000 people, with women making up 70 per cent of the workforce. This factory is India’s largest in terms of employee numbers across all industrial sectors. 

Tata Electronics, which took over Wistron’s Karnataka plant 18 months ago, contributed 30 per cent to the total production during the April–October period. The pace of production has accelerated since Tata’s acquisition. 

Pegatron, located in Tamil Nadu, contributed the remaining 14 per cent. All three vendors are in the middle of the fourth year of the five-year PLI scheme. 

Given the current growth rate, Apple could go past $18 billion in iPhone production for FY25.

 

 The estimated market value of these iPhones is expected upwards of $25 billion.

 

The smartphone PLI scheme has been hailed as the most successful of the 14 such schemes across various sectors. The India Cellular and Electronics Association (ICEA) recently informed the government that, with a PLI disbursement of roughly Rs 5,800 crore over four years (until FY24), the industry has contributed Rs 1.1 trillion in duties on mobile components and incremental goods and services tax (GST).

 

In April 2020, when the smartphone PLI was announced, the government also increased the GST on mobile phones from 12 per cent to 18 per cent.

 

According to ICEA, the sector’s value addition has risen from 12 per cent to nearly 20 per cent over the past four years.