Apple has begun producing the iPhone 11, its current flagship smartphone, in India via its handset assembler Foxconn, reports TechCrunch. The Silicon Valley giant has made its older iPhones in the nation since 2017 but had previously only assembled its latest handsets in China.
The company’s change in practices aligns with its reported desire to diversify its manufacturing operations and interest in the Indian smartphone market.
Apple’s Move to Shift Production Capacity into India
According to TechCrunch, Apple has not initiated a full-on shift in its supply chain. Foxconn reportedly only made a small batch of Indian made iPhone 11s. However, the change in production sites reflects larger revisions in the company’s methodologies. Fearing new tariffs because of rising Sino-American trade tensions, the brand has pushed to expand its manufacturing capability beyond China since mid-2019.
Last July, the company asked its partners to investigate shifting 15-30 percent of their facilities outside the mainland.
Apple vendor Foxconn subsequently committed $1 billion to building out its Indian iPhone assembly complex. Pegatron, another one of Apple’s smartphone producers, is building a factory in the South Asian Republic to make its mobile devices. Wistron also announced plans to open a second plant in the country to make Apple handset components in February.
Since building and staffing facilities capable of volume production is a costly and time-intensive process, most of Apple’s iPhone will be Chinese made for the next several years. But the rapid movement of the company’s suppliers suggests the brand has an aggressive supply chain revamp roadmap. In addition to avoiding profit eating import/export taxes, the electronics maker sees a lot of appeal in the Indian smartphone market.
Apple’s Expansion into India’s Smartphone Market
While Apple’s efforts to move some of its supply chain to India serves a global purpose, the company also wants to expand its presence in the world’s second-largest handset market.
At present, the company’s devices only represent 1 percent of the country’s entire smartphone sector. One reason for its modest footprint in the area is the comparatively high cost of its hardware. The firm’s mobile devices are priced much higher than competing handsets from Xiaomi, Oppo, and Vivo. The brand also had to pay a 20 percent duty to bring its latest iPhones to India.
By shifting more production capacity into the country, Apple has room to make its smartphones more affordable.
In February, the company acknowledged the importance of the Indian market by revealing it would expand its online store into the region in 2020 and a physical location in 2021. Though the conglomerate made those announcements before the coronavirus outbreak turned into a pandemic, there is no reason its plans cannot continue once the global health crisis passes.
Apple also stands to benefit from a recent movement to cultivate technological transformation within India.
This month, Qualcomm, Intel, and Google committed to investing billions to bolstering India’s digital infrastructure. Once the region becomes more connected, its gross domestic product will rise in value. As that economic evolution takes place, iPhones will become more financially accessible to the locals. Last month, Mumbai revealed it would offer $6.6 billion in subsidies to entice foreign microelectronics companies into building new component plants in-country.
As a result, Apple could have a major part of its production capacity and customer base in India by decade’s end.