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Apple Recovery Strategy – Build Smartphones in India
January 06, 2019
 
Apple has had a difficult time in India, the world’s fastest growing smartphone market and with the reduction of sales in China; the company is going to beef up its position in India. Indian taxes on import of devices and components have also heightened Apple’s headache in a market where it has only a 1 percent share by smartphone shipments. Samsung, Xiaomi, Gioneeand Nokia already have local assembly plants. Until now, only the lower-cost SE and 6S models were assembled in India through Wistron Corp’s local unit in the Bengaluru technology hub. Its sales in India have been focused on lower-end phones - more than half of its sales volume is driven by models older than the iPhone 8, launched last year, according to technology research firm Counterpoint. Now, Apple Inc. will have its top-end iPhones assembled in India through the local unit of Foxconn in 2019, which is the first time the Taiwanese contract manufacturer will have made the product in the country. Foxconn will be assembling the most expensive models, such as devices in the flagship iPhone X family, in an attempt to lower the ASP.  The work will take place at Foxconn’s plant in Sriperumbudur town in the southern state of Tamil Nadu. Foxconn already makes phones for Xiaomi Corp in India, will invest 25 billion Indian rupees ($356 million) to expand the plant, including investment in iPhone production, Tamil Nadu’s Industries Minister M C Sampath told Reuters. The Sriperumbudur plant had been shuttered after a nearby Nokia production plant was excluded from the company’s sale to Microsoftback in 2013, with Nokia representing ~70% of Foxconn’s business at the plant, which cost the region ~8,000 jobs, but the tax dispute, which caused the Microsoft exclusion was resolved in April and the plant reopened.  Foxconn currently assembles smartphones for Chinese smartphone producers Xiaomi, Gioneeand Nokia itself at a nearby plant. Until now, only the lower-cost SE and 6S models were assembled in India through Wistron Corp’s local unit in the Bengaluru technology hub. Its sales in India have also been focused on lower-end phones - more than half of its sales volume is driven by models older than the iPhone 8, launched last year, according to technology research firm Counterpoint.