What just happened? India’s Commerce and Industry Minister Piyush Goyal confirmed reports that Apple is making the iPhone 11 in India. It is an easy victory: Apple has reduced its dependence on China, and they can circumvent India’s significant import tax.
Apple has wanted to produce devices in India for several years. According to TechCrunch, they had been unable to find a local manufacturer capable of meeting their stringent quality standards, so they had to wait for new assembly lines to be built. In 2017, Wistron began producing flagships from previous years in India to sell as inexpensive devices, but as of this month, Foxconn has been able to produce the iPhone 11 at its facilities near Chennai. The first batch is believed to have already been shipped to nearby retailers.
Apple CEO Tim Cook announced in February that Apple will launch an updated online store in India in the coming months, and will open physical stores next year. Apple makers Foxconn and Pegatron recently announced plans to invest in their Indian facilities. India is the second largest smartphone market in the world and is much further from saturation than the United States or China.
However, one key question remains. Apple will no longer have to pay a 20% import tax. Although manufacturing in India is probably more expensive than manufacturing in China, Apple will still save a fortune. Will they pass those savings on to consumers and give them a discount, or will they expand their profit margins?
Image credit: Jason Leung on Unsplash
