Apple starts iPhone 7 production at Bengaluru-based Wistron plant
Expanding its portfolio of "Made in India" products, Apple has started producing iPhone 7 at the Wistron plant in Bengaluru. The move gives an impetus to Apple's India manufacturing plans, considering the world's largest company is rattled by poor sales and plans to tap into the country's growing market by locally producing high-end iPhones. Here's more on this development.
Apple now manufactures three iPhones in India
Taiwanese contract manufacturer Wistron, which already assembles iPhone 6s and iPhone SE in India, started making the iPhone 7 in the country last month. Evidently, the cost of making iPhones in India is cheaper than importing them as completely built units. This is due to the attractive duty concessions offered by the government to bolster local manufacturing under its 'Make in India' initiative.
Cheaper production costs may not translate to lower price tags
Meanwhile, according to IDC's Navkender Singh, despite higher margins, the company will not introduce price cuts on iPhone 7. Instead, Apple "will use the funds in their channels, for market development purposes most likely." He observes that the local manufacturing of iPhone 7 is about "revalidating Apple's India manufacturing capability before they scale up to other models."
Why is India important for Apple's success?
Apple has been shaken by poor demand for its iPhones. Since 2014, the trillion-dollar company recorded its weakest year in 2018. Hence, in 2019, when trade-wars dominated US-China relations, the Cupertino giant may be looking at India more like a manufacturing and export hub. Further, in India's fast-growing smartphone market, Apple has lost 50% market value year-on-year (2017-18) to competitors like OnePlus and Xiaomi.
Apple testing waters in India before taking the plunge
With iPhone 7, Apple is testing waters in the manufacturing segment as it plans to start the assembly of high-end iPhones at the Foxconn's Tamil Nadu-based plant soon. Moreover, the company may phase out iPhone 6-series and introduce iPhone 7 as its entry-level model in India. But it will have to keep the prices competitive, else modern-day phones will outshine the 2016's iPhone 7.
