From Apple’s point of view, the company will not only save a massive 22 percent import duty by assembling the products locally under the Make in India initiative but will also rely less on its Chinese manufacturing plants, which had taken a significant hit due to the pandemic. But will it pass the profit to consumers by dropping the iPhone 11's price?
Apple is keen on grabbing some market share in India. After assembling the iPhone XR and some older-generation iPhones, the Cupertino, California-based US tech giant has begun making its latest flagship smartphone, the iPhone 11, in India.
Manufacturing the iPhone 11 in India could certainly be a move in the positive direction for both Apple and its consumers here in India.
From Apple’s point of view, the company will not only save a massive 22 percent import duty by assembling the products locally under the Make in India initiative but will also rely less on its Chinese manufacturing plants, which had taken a significant hit due to the pandemic.
Apple is also likely to cut down the price of the iPhone 11 after making it in India. While there is no official confirmation, a teaser on Amazon India’s website suggests that the iPhone 11 will get a price drop during the Amazon Prime Day sale. The discounted price will be revealed on August 6, which is when the Prime Day sale kicks off.
A price drop, coupled with the rising sentiments of purchasing smartphones manufactured locally, will also lure consumers to buy the world’s number one selling smartphone.
Tarun Pathak, Associate Director at Counterpoint Technology Market Research, told Moneycontrol that the local production of the iPhone 11 could reap benefits for Apple. A reduced pricing will help Apple compete against Android manufacturers like OnePlus, Samsung and the likes, who have captured the sub-Rs 30,000 to Rs 50,000 with their Lite and flagship smartphones.
“We have already seen the success of the iPhone XR in India after it received a significant price drop from Rs 76,900 to Rs 59,900. This, coupled with some e-commerce sales, aided in making the iPhone XR the number one smartphone last year," Pathak said.
Notably, Apple has a 1 percent market share in India, which is the world’s second-largest smartphone market with over 158 million shipments in 2019 alone.
“The iPhone 11, too, is likely to replace the iPhone XR as Apple’s most-successful iPhone this year. A potential price drop will make the iPhone 11 more accessible to existing and new consumers who are waiting for the iPhone 11 to get more affordable,” Pathak further added.
The iPhone 11 was launched in India for Rs 64,900. However, owing to the hike in GST, Apple increased the price of its entry-level flagship to Rs 68,300 in April. The smartphone was recently available for Rs 62,900 as part of the sale offers on select e-commerce websites.
With the government promoting Make in India via a production-linked incentive (PLI) worth Rs 42,000 crore, Apple could be one of the biggest beneficiaries.
One of Apple’s key suppliers, Foxconn, had announced that it will invest USD 1 billion to expand its India factory. Another supplier Pegatron (second-largest iPhone assembler) was reportedly planning to invest and set up a subsidiary in the near future. The expansion will certainly create more jobs while saving capital in the form of various duties.Apple is also planning to assemble the iPhone SE 2020 in Wistron’s plant on the outskirts of Bengaluru.