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One in every 3 Apple engineers is Indian

BANGALORE: India has become a major ingredient in Apple’s secret sauce, and the scale may surprise many. It is estimated that a third of the $171-billion company’s engineering staff is Indian, and that a large and increasing proportion of its enterprise software, service and support work is done by Indian IT vendors.

Apple filed 1,750 H-1B applications during the 10-year period 2001 to 2010, but the number increased sharply to 2,800 during 2011-13. US-based HfS Research that compiled the data says the majority of the H-1Bs would be Indians, indicating that the iPhone and iPad maker’s dependence on Indian engineers has risen significantly in recent years.

“About one-third of Apple’s engineering headcount consists of Indians who are either on H-1B or on Green Card,” said Pareekh Jain, principal analyst at HfS Research.

HfS arrives at that conclusion looking at figures Apple disclosed in 2012, when it said it had 47,000 people working directly for it in the US, of which 7,700 were customer support operators, and 27,350 worked retail in Apple Stores, leaving about 12,000 as engineers, designers, marketers and other white-collar tech product workers.

HfS Research also finds that Apple works with at least five India-based IT vendors — including four large firms and one small firm — and the scope of the work they do has been rising.

“Apple’s outsourcing strategy can be described in three words as ‘outsourcing for growth’. The scope of outsourcing work has been enlarged in the last two or three years. From 2013, Apple has dedicated IT outsourcing vendor managers based out of Bangalore who are acting as the bridge between Apple’s IT managers and India based IT vendors,” said Jain.

HfS Research declined to name the IT vendors. TCS, Infosys and Wipro are known to do work for Apple. Apple is seen to be among Infosys’ top 10 clients. Two years ago, Infosys rented a 1.4-lakh sqft office space near its headquarters in Electronics City to house employees who would work exclusively for Apple. The building had a capacity to initially house 1,400 people.
Apple engages with Indian IT players for application development & maintenance, business intelligence & data-warehousing, data analytics applications, enterprise application integration and ERP implementation. Indian vendors also provide software support for development and maintenance of Apple retail stores, specific work for iTunes, iCloud, internal applications of release management, job search portals, and porting of web applications to iOS mobile.

“The other aspect of Apple’s outsourcing strategy is multi-sourcing, with each IT vendor having some strong focus in areas like channels, CRM, supply chain, marketing and finance, and some overlap,” Jain said.

Apple did not respond to a mail TOI sent on Friday seeking confirmation of the data. That was perhaps to be expected from a company regarded as among the most secretive in the world.

In 2006, Apple had leased space in Bangalore to establish a technical support centre with 3,000 people. But within months the company abandoned the plan following an outcry from customers casting doubts on India’s ability to service and support Apple’s high-quality products. But in the following years, Apple was clearly convinced it could not do without India and found other ways to use the country’s talent.

More recently, incremental work coming from Apple has increased substantially as the volumes and complexity of Apple’s supply chain has increased. Apple, whose market valuation is now stands at $585 billion, sold 35.2 million iPhones in the June quarter, a growth of 12.7% compared to the same period last year. Apple said demand from BRIC economies – Brazil, Russia, India and China – spurred iPhone sales.

“Its data warehousing applications have petabytes of data. Its product lines, volumes and need for analytics have increased. Also, Apple has acquired more than 30 firms in the last three years whose systems and applications need migration and integration to Apple’s applications. All this is translating into additional work for IT vendors,” Jain said.

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