119425RIL has remained flat in last two months, should one buy its shares now or not?

In a first, Apple dethroned Koren chaebol Samsung as the largest smartphone exporter from India, dispatching as much as 49% of the country’s total 1.2 crore shipments in the April-June quarter. In comparison, Samsung’s share in the export pie stands at 45%, according to a report by the Times of India.

Apple’s big bite can be attributed to the accelerating expansion of the California-based giant in India. Incidentally, Apple gets its phones assembled in India through its largest contract manufacturer Foxconn from Taiwan.
The US major’s share of exports zoomed from a mere 9% of the roughly 80 lakh smartphones shipped in Q2 of 2022, to almost half the total smartphone exports in Q2 of 2023.
Officials associated with the smartphone industry in said India exported around 1.3 crore smartphones in January-March quarter this year, which declined to 1.3 crore – a drop of about 7.7% — in April-June 2023.

While Apple and Samsung dominated the exports charts the other brands which had a small contribution included Xiaomi, Moto, Tecno and Vivo.

In value terms, Apple has been the top exporter in H1 of 2023. While Apple focusses on the premium and super-premium segments, Samsung manufactures devices across price bands.

Apple began assembling in India in 2017. Now all its contract manufacturers in India Foxconn, Wistron and Pegatron are increasing production from H2 of 2022. While Apple has been assembling iPhone 14 in India, it has already begun making iPhone 15 in the country. It has already been reported that the top-of-the-ine iPhone 15 Max would also be manufactured in India soon.

In fact, the iPhone 15 that Foxconn is manufacturing in its Chennai plant is supposed to be on sale in India and some other parts of the world from September 22.

All three contract manufacturers of apple are part of the Indian government’s PLI scheme for smartphone manufacturing.

The Apple strategy to accelerate production in India is a part of its China plus 1 design where it wants to diversify manufacturing from China which is its largest production hub.

Samsung’s dip in numbers can be linked to the downturn in global demand of android phones due to economic slowdown in many countries. Samsung’s share of export in terms of volumes crawled down from 50% in January-March 2023 to 45% in April-June 2023.

It is also said by some industry executives that Samsung’s factory in North Vietnam is churning out more phones than any other factory in the world and the decline from India is partly attributable to this fact. Vietnam is becoming a larger export hub for the Koren giant.

“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,” an industry executive said.

Exports by other android brands such as Xiaomi, Motorola, Vivo and Transsion inched down from 10% in January-March in 2023 to 6% in April-June in 2023.

A Motorola India spokesperson told the newspaper that despite global shipments decreasing in January-March of 2023, the company witnessed growth in exports in 2023 with a 25% increase in Q1 over the previous quarter.

“We have successfully partnered with Dixon to be among the first participants of the PLI scheme for mobiles. In addition to enhancing our ability to serve Indian customers with innovative products, we are proudly manufacturing 100% of our devices in India and exporting to global markets worldwide, including the US,” said the spokesperson for Motorola.

Counterpoint Research, a leading market researcher, predicted that 2023 global smartphone shipments will decline 6% to 115 crore handsets. It is the lowest number in a decade, thanks to economic slowdowns in the US and China.