Business
Why Apple did not apply for PLI 2.0 scheme for IT hardware like laptops, tablets – Times of India
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Apple has opted not to seek participation in the Production Linked Incentive (PLI 2.0) scheme for IT hardware in India. This decision is primarily attributed to the fact that products like laptops and tablets constitute a relatively minor portion of Apple’s overall sales within the Indian market, according to an ET report. The report said that Apple has no immediate plans for local production of these products. This insight comes from two prominent industry figures.
Apple’s approach to manufacturing differs from the conventional setup, as it collaborates with global electronic contract manufacturers rather than establishing its production facilities. Interestingly, Apple also refrained from applying for the smartphone PLI scheme, as indicated by the executives.
According to these sources, approximately 80% of Apple’s revenue in India stems from smartphones, which serve as the company’s cornerstone product. Therefore, Apple’s strategic focus lies in augmenting iPhone production within the country.
Nevertheless, it’s worth noting that even for smartphones, the Cupertino-based tech giant did not pursue PLI benefits, although its manufacturing associates, such as Foxconn and Wistron, did submit applications for the scheme.
An executive provided an additional insight, stating that even if Apple were to contemplate future manufacturing of laptops and tablets in India, it would invariably engage contract manufacturers.
Thus, similar to smartphones, Apple has abstained from engaging with the PLI 2.0 initiative for IT hardware. Numerous prominent contract manufacturers have already engaged with the PLI 2.0 scheme, and Apple is likely to collaborate with them, the executive said. However, as of now, Apple does not have immediate plans for IT hardware production in India.
An email sent to Apple India was unanswered.
The Indian government has received applications from 40 companies for the PLI 2.0 scheme, encompassing the production of laptops, tablets, servers, and personal computers. These applicants include notable entities like HP, Dell, Foxconn, Acer, Flex, and Asus.
The government expects the PLI 2.0 initiative to spur Rs 4.7 lakh crore in incremental production approximately, generate around 75,000 jobs and also attract over Rs 5,000 crore in additional investments. The total allocation for this program is around Rs 22,890 crore.
Samsung, the Korean tech giant, has also chosen not to partake in the PLI 2.0 scheme, despite being a beneficiary of the smartphone-focused PLI initiative. Samsung holds a relatively minor presence in the laptop market, and the tablet sector does not constitute a significant revenue stream for the company. An email seeking comment from Samsung went unanswered.
An executive commented on the matter, stating that the majority of companies applying for the PLI 2.0 scheme are primarily IT-focused entities or contract manufacturers aiming to enter or expand their footprint in this sector. Furthermore, the executive pointed out that the global laptop market is experiencing contraction, while the tablet market is not exhibiting substantial growth.
According to regulatory filings with the Registrar of Companies (RoC) in India, products and associated software contributed 93.7% to Apple’s total revenues for the 2021-22 fiscal year. 6.3% of revenues were attributed to marketing and maintenance-related services for Apple products and services. As of now, financial data for the 2022-23 fiscal year from the company is yet to be filed.
Apple’s approach to manufacturing differs from the conventional setup, as it collaborates with global electronic contract manufacturers rather than establishing its production facilities. Interestingly, Apple also refrained from applying for the smartphone PLI scheme, as indicated by the executives.
According to these sources, approximately 80% of Apple’s revenue in India stems from smartphones, which serve as the company’s cornerstone product. Therefore, Apple’s strategic focus lies in augmenting iPhone production within the country.
Nevertheless, it’s worth noting that even for smartphones, the Cupertino-based tech giant did not pursue PLI benefits, although its manufacturing associates, such as Foxconn and Wistron, did submit applications for the scheme.
An executive provided an additional insight, stating that even if Apple were to contemplate future manufacturing of laptops and tablets in India, it would invariably engage contract manufacturers.
Thus, similar to smartphones, Apple has abstained from engaging with the PLI 2.0 initiative for IT hardware. Numerous prominent contract manufacturers have already engaged with the PLI 2.0 scheme, and Apple is likely to collaborate with them, the executive said. However, as of now, Apple does not have immediate plans for IT hardware production in India.
An email sent to Apple India was unanswered.
The Indian government has received applications from 40 companies for the PLI 2.0 scheme, encompassing the production of laptops, tablets, servers, and personal computers. These applicants include notable entities like HP, Dell, Foxconn, Acer, Flex, and Asus.
The government expects the PLI 2.0 initiative to spur Rs 4.7 lakh crore in incremental production approximately, generate around 75,000 jobs and also attract over Rs 5,000 crore in additional investments. The total allocation for this program is around Rs 22,890 crore.
Samsung, the Korean tech giant, has also chosen not to partake in the PLI 2.0 scheme, despite being a beneficiary of the smartphone-focused PLI initiative. Samsung holds a relatively minor presence in the laptop market, and the tablet sector does not constitute a significant revenue stream for the company. An email seeking comment from Samsung went unanswered.
An executive commented on the matter, stating that the majority of companies applying for the PLI 2.0 scheme are primarily IT-focused entities or contract manufacturers aiming to enter or expand their footprint in this sector. Furthermore, the executive pointed out that the global laptop market is experiencing contraction, while the tablet market is not exhibiting substantial growth.
According to regulatory filings with the Registrar of Companies (RoC) in India, products and associated software contributed 93.7% to Apple’s total revenues for the 2021-22 fiscal year. 6.3% of revenues were attributed to marketing and maintenance-related services for Apple products and services. As of now, financial data for the 2022-23 fiscal year from the company is yet to be filed.
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