Manufacturing iPhones in India costs the company less than importing it because of the duty concessions from the government
Expanding its 'Make in India' portfolio, Apple has now started making its iPhone 7 model in India. This move will help the government's agenda of promoting India as a manufacturing hub. The company already makes iPhone SE and iPhone 6s locally.
"We are proud to be producing iPhone 7 in Bengaluru for local customers, furthering our long-term commitment in India," Apple told The Economic Times. Since the beginning of March, Taiwanese contract manufacturer Wistron has been producing iPhone 7 models from its Bengaluru facility.
Manufacturing iPhones in India costs the company lesser than expenditure involved in importing, because of the duty concessions from the government. However, this does not mean lower prices though, as analysts said the company will invest the money made from these devices to push sales and marketing.
Wistron recently got the Centre's approval for its proposal to widen its manufacturing capacity worth Rs 5,000 crore to manufacture high-end Apple devices.
Navkender Singh at IDC India believes that iPhone 7 is a low-risk product for Apple to make in India. "To that extent, the local manufacturing is about revalidating Apple's India manufacturing capability before they scale up to other models," he said.
2018 was a tough year for the iPhone maker as sales took a hit. Apple overhauled its management and sales strategy and is focusing on India. Analysts said the company wants to make India a manufacturing and export hub, in the backdrop of US-China tensions. Due to stiff competition from Chinese phone makers like Xiaomi, Apple's market share in India dropped from 2.4 percent in 2017 to 1.2 percent in 2018.
Singh said that local manufacturing is not going to help regain market share, which will still be low in 2019. However, the company will be able to test the manufacturing segment for its high-end models.Just last week, Apple launched a host of services including credit card, content subscription service and a digital video game platform.Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months at 289. Use code FREEDOM.