Two weeks ago we told you that Apple’s largest manufacturing partner Foxconn plans to invest the princely sum of $ 1 billion to increase iPhone production in India. The latter is the second largest smartphone market in the world after China, although it is still a developing country. As a result, lower priced phones sell the best, including Xiaomi value phones and Samsung’s Galaxy A series. The Iphone? It is considered a luxury item in the country.
Apple is producing the iPhone 11 in India
By producing the iPhone in India, Apple avoids paying a hefty 22% import tax on units shipped to the country from China. And locally made iPhones dovetail with Prime Minister Narendra Modi’s Make in India initiative that favors products made in, well, India. In the country, the contract manufacturer Wistron joins the years 2016 iPhone 7 in Bangalore, while in Chennai Foxconn does the iPhone XR. By sticking with older models, Apple can sell iPhones to Indian consumers at a more affordable price.
Apple iPhone 11 is now being assembled in India
For some years there has been talk that Apple produces some of its current higher priced models in India and India.com notes that on Friday, India’s Minister of Commerce and Industry Piyush Goyal said the tech giant has started to iPhone 11 at a Foxconn facility in India. While the phone has the lowest price among Apple’s current flagship phones, Goyal proudly said in a tweet: “Significant push to make in India! Apple has started making iPhone 11 in India, bringing a model of first line for the first time in the country “
In India, some iPhone 11 units that were produced in the country are available in retail stores. The crash that was ordered due to the coronavirus delayed these units from reaching store shelves, but they are now slowly making their way there. However, the locally made iPhone 11 still has the same prohibitive (for Indians) manufacturer’s selling price found on units imported from China. Anonymous sources say Apple has asked its supply chain in China to ship components to India for iPhone SE (2020). The most affordable phone in the iPhone line, the device is tailor-made for Indian consumers who cannot afford any model in the iPhone 11 line.
Since relations between the United States and China remain poor, Apple is concerned that the United States may impose tariffs on the iPhone. A tariff is just a fancy name for an import tax, and the Phase One deal signed by both countries saved Chinese manufacturers (and companies that assemble their phones at Apple, like China) from having to pay a tax or pass it on to your customers in the form of higher prices. While moving some production out of China was an issue Apple allegedly had on the table for some time, last year there were some reports that the tech giant was looking to move 20% of phone production out of China. India would be the obvious choice, though there are questions about whether Apple can build a supply chain that can supply parts in the quantity and quality that Apple needs. The second-largest iPhone assembler, Pegatron, will join Foxconn and
Wistron in India according to the latest rumors.
There are more than half a billion smartphone users in India, but the country had a Gross National Income per capita of $ 7,680 as of 2018 according to the World Bank; which compares to over $ 63,000 in the US Therefore, premium phone sales are much lower in India. Apple is the leader in that category, while Xiaomi is the leading smartphone manufacturer in the country. During the second quarter, the top five smartphone vendors in India were Xiaomi, Vivo, Samsung, Oppo, and Realme. Due to the COVID-19 pandemic, The number of phones delivered to the country decreased almost half from 33 million in the second quarter of 2019 to 17.3 million during the quarter of this year.
