Before we get deeper into Apple’s move in India, let’s look at the history of the company showing interest in India. Apple decided to sell refurbished iPhones in India, but the Government turned down the idea. The company also opened its offshore facility in Hyderabad last year, which was a big thing for India.
Then the Government relaxed the local sourcing norms, to allow companies like India to start their manufacturing process in India. Tim Cook, Apple’s CEO, finally took a step towards it by planning to open its own stores here, starting with Bengaluru.
Now, the company considers India as an important market, as global sales slump. Apple has decided to assemble, not manufacture, phones in India by April 2017. This means that the company has not been completely able to figure out the 30% local sourcing norm, and has chosen to assemble the products here.
By April 2017, Apple will be putting together phones manufactured by Taiwan’s Wistron Corp. in Bengaluru. Priyank Kharge, IT Minister of Karnataka, confirmed the same by the discussions he had with representatives from Apple.
Apple, recently, requested the Indian Government to get a 15-year tax holiday, and the Government has given a thought to it. The company has not yet confirmed about its manufacturing in India, but given that Foxconn manufactures phones in India for other brands, some developments may happen soon.
Priyank Kharge talked about this announcement, “Apple’s iPhones will be made in Bangalore and all devices will be targeted at the domestic market. We did not discuss any other incentives.”
Will it bring iPhone prices down?
The company has not announced what products it is going to start assembling in India. It might start with the smaller and cheaper iPhone SE and then graduate to iPhone 7 and the to-be-launched iPhone 7S/8.
The prices of these phones will go down a bit, not a lot, but they will make a difference to Indian consumers. As the Government wants to promote ‘Make in India’, Apple might consider sourcing some parts of the iPhone locally. While it has strict standards and control, Indian companies will be able to reach those expectations.
The company intends to make India a hub for its manufacturing business in the future, maybe even export phones from here. This will add a lot of business to India and the local companies here, also improving the image of India as a country getting involved in manufacturing.
Source: Bloomberg
