It appears that Apple now plans to start manufacturing the iPhone 11 at facilities in India. A few months earlier in March, the Indian Information Technology Ministry approved a $700 million investment by Wistron, a contract manufacturer to make Apple devices in the country. This was limited to the manufacture of older models like the iPhone 6S and the iPhone SE.
An Economic Times report indicated that the company more recently started manufacturing the newer iPhone XR model at a factory in Chennai. According to that same report, Apple now plans to manufacture the iPhone 11 at this facility in the coming months.
Apple Moves Forward with Make In India
This represents a major milestone in the company’s India presence. Economic Times sources told the publication that manufacturing new models requires a greater degree of technical expertise. Moreover, these models won’t just be sold in India. They will be exported to other markets, including Europe.
This will not have a major impact on Apple’s pricing in India, however. Apple product prices tend to be on the higher side in the Indian market, relative to the rest of the world. Even though the company saves 20 percent on import tariffs through local manufacturing, it does not plan to cut prices. The step-up in Apple’s India plans is in the context of the country’s “Make In India” strategy that aims to turn India into a global manufacturing hub. It is particularly relevant in the context of the ongoing trade war between the United States and China.
Foxconn, the manufacturer of most Apple devices, produces the bulk of its iPhones in Shenzhen. With the ongoing US-China trade war, there is greater uncertainty about tariffs, exchange rates, and more that could affect the competitiveness of Chinese manufacturing. Moreover, as costs (both labor and capital) increase in China, there is a general tendency for manufacturers to move to lower-wage alternatives in the neighborhood.
Local iPhone manufacturing is also good news for Apple’s long-term plans for the Indian market. The company currently has a 2 percent market share in the Indian smartphone market. Considering that the number of Indian smartphone users is slated to touch 500 million in the next couple of years, this is a high priority market. While pricing remains high and does not reflect reduced tariff costs, a greater Indian manufacturing base could help Apple compete on price if it has to.
All in all, news of the iPhone 11 being manufactured in India is good for both global and Indian consumers. As the country’s not a party to the ongoing US-China trade war, Indian-made iPhones could serve as a buffer in a time of uncertain pricing.