Apple’s iPhone 17 grows roots in India, but will AI catch up?

Apple is expected to launch its iPhone 17 series in September next year, comprising four models: the iPhone 17, iPhone 17 Air, iPhone 17 Pro, and iPhone 17 Pro Max. Among these, the standard iPhone 17 is already being manufactured at Foxconn’s facility in Bengaluru, India.

Foxconn, a Taiwanese multinational and the world’s largest iPhone assembler, has made significant investments in India. Its facility in Devanahalli, near Bengaluru, is its second-largest factory outside China, developed with an investment of approximately USD 2.8 billion (around Rs 25,000 crore). The company is also reportedly producing iPhone 17 units at its Chennai plant, where production has recently commenced.

Apple continues to scale up iPhone production in India. In the financial year ending 31 March 2025, the company is estimated to have produced iPhones worth USD 22 billion in the country, as per a Bloomberg report published in April this year.This figure is expected to rise in FY2026. According to Apple CEO Tim Cook, India contributed significantly to iPhone sales in the United States during June 2025.

However, high import tariffs imposed by the US government present a key challenge for Apple and its manufacturing partner. Under current trade policies introduced during the Trump administration, Indian exports to the US face tariffs as high as 50%. This could substantially reduce Apple’s profit margins on iPhones sold in the US, even if production volumes in India continue to grow. While Apple could offset this by increasing retail prices, it risks affecting demand in a highly competitive market.

Will AI catch up?

As Apple prepares for the next iPhone launch, questions remain about its position in the fast-evolving field of artificial intelligence. The company has been criticised for lagging behind rivals in AI development, with some industry observers comparing its shortcomings to Microsoft's past failures in mobile.

Earlier this year, Bloomberg reported that Apple was exploring the acquisition of an AI search company, potentially Perplexity AI. While acquiring such a firm may not immediately solve Apple’s AI shortcomings, it could help the company build a stronger strategic narrative in the space. For a company of Apple’s scale, the potential long-term gains,  both in technology leadership and market valuation, could justify an acquisition valued at around USD 20 billion.