Apple Establishes Subsidiary in India to Drive R&D, Product Development

Apple Inc. has taken a significant step towards strengthening its operations in India by establishing a wholly owned subsidiary, Apple Operations India.

This move is expected to involve India in the research, design, and testing of Apple's future products, marking a first for the Cupertino-based tech giant in the country.

The new entity, which was registered with the Registrar of Companies (RoC) last week, has outlined its activities in a regulatory filing, including the procurement of engineering equipment, leasing of facilities, employing engineers for hardware development, and providing failure analysis services to group companies. Additionally, the filing mentions that Apple has extended a ‘letter of comfort,’ assuring operational and financial support for the subsidiary "for the foreseeable future."

This marks a departure from Apple’s previous operational model, where research and development (R&D) was conducted in the US, China, Germany, and Israel. While the company has previously outsourced manufacturing to India, this is the first time Apple will set up a direct subsidiary for R&D and product development within the country.

Apple Operations India, which is still in its investment phase, has reported capital work-in-progress of Rs 38.2 crore and fixed assets worth Rs 36.8 crore. According to Mohit Yadav, founder of business intelligence firm AltInfo, this move indicates Apple’s long-term commitment to expanding its presence in India beyond just assembly and sales.

At present, global electronics brands like Samsung, LG, and Sony have R&D operations in India, primarily focusing on hardware localization and software development. However, Apple’s new venture signals a deeper engagement, particularly with its focus on manufacturing support, procurement management, and R&D.

The establishment of Apple’s subsidiary comes amid an evolving economic landscape, with heightened US-China tensions. However, industry experts like Tarun Pathak, Director of Research at Counterpoint Research, believe that the move is more about leveraging India's technological talent pool rather than responding to geopolitical dynamics.

"Apple has a strong base of over 17,000 app developers in India, with a developer center in Bengaluru. This new R&D company reflects India’s growing importance as a key market for Apple," Pathak said.

Apple Operations India's memorandum of association reveals that the subsidiary will be involved in a wide range of activities, including the development, manufacturing, support, and R&D of technologies related to science, engineering, and computer systems. It will also provide equipment and technical services to third-party manufacturers and contractors.

In addition to R&D, Apple has been achieving consistent sales growth in India, with CEO Tim Cook noting the company’s record-setting performance in the country during earnings calls. Apple has also expanded its manufacturing footprint, becoming the largest electronics exporter from India through collaborations with partners like Foxconn, Tata Electronics, and Pegatron.

With the Indian market contributing approximately 14% to Apple's overall production, the company is poised to further strengthen its presence through the new R&D and design initiatives.

Also Read: Apple’s 'Made in India' iPhones Soar; Exports Reach $6 Billion