A midst rising iPhone prices and slumping sales, Apple looks more committed than ever to India. The company is reportedly planning to start mass production of iPhones in the country with the help of Foxconn. The Taiwanese company is Apple’s largest manufacturer of iPhones and its plans to start mass production in India was reported by Bloomberg.
Foxconn Technology Group Chairman Terry Gou told Bloomberg that Prime Minister Narendra Modi invited him to India to plan the company’s expansion in the country. Apple already has Wistron producing older iPhone models in Bengaluru, and the manufacturer recently started making the iPhone 7 locally. With Foxconn, Apple plans to expand manufacturing to produce newer iPhone models.
“In the future we will play a very important role in India’s smartphone industry,” Gou said at an event in Taiwan. “We have moved our production lines there.”
Bloomberg reported earlier this month that Foxconn was within weeks of beginning a trial run of producing the latest iPhone models in India. Apple has been keen to break into the Indian smartphone market, which is one of the fastest growing markets in the world. But the company has been struggling to grab significant market share in the country due to rising iPhone prices and affordable alternatives from competing OEMs.
By locally manufacturing iPhones in India, Apple will be able to avoid import duties of 20 per cent, which means newer iPhone models like the iPhone XS and XR could become more affordable. As per the report, Foxconn plans to initially invest $300 million to set things up for Apple in India.
Foxconn’s move to start mass producing iPhones in India signals a shift for the company away from China. “For Foxconn, the China market for iPhones is saturated, and labor costs are three times higher compared with India,” said Karn Chauhan, a Gurgaon-based analyst at Counterpoint Research. “India is still an emerging smartphone market, it has a lot of potential domestically and could serve as an export hub for the region.”
Apple has been struggling in China as well due to stiff competition from local competitors like Huawei and Xiaomi, so it makes sense for the company to make a big push in India. Apple could also open its own retail stores in India by meeting the 30 per cent local sourcing rule, and it could achieve this by mass manufacturing iPhones in the country.