- India will be only the third country globally to assemble iPhones.
- Apple said it is beginning initial production of a small number of iPhone SE in Bengaluru
BENGALURU: Apple will begin full-scale production of ‘Made in India’ iPhones coming out of a factory in Bengaluru later this year, as it awaits to seek more clarity on the goods and services tax (GST) rollout. The Cupertino-based maker of iPhones and iPads has completed the assembly of a few thousand iPhone SEs in Bengaluru that will reach its distribution masters Redington and Ingram shortly. The firm will start shipping iPhones to domestic customers later this month. The Wall Street Journal reported the development on Wednesday.
India will be only the third country globally to assemble iPhones, signalling how important it has become for one of the world’s most valued companies. The 4-inch phone powered by an A9 chip that’s used in iPhone 6S, comes with a 12-megapixel camera. Taiwanese company Wistron, an original equipment manufacturer (OEM) of Apple, will make the iPhones out of its facility in the city’s industrial hub of Peenya. In response to TOI’s query, Apple said it is beginning initial production of a small number of iPhone SE in Bengaluru. “iPhone SE is the most popular and powerful phone with a four-inch display in the world and we will begin shipping to domestic customers this month,” the company said in a statement.
Karnataka IT minister Priyank Kharge said Apple’s decision to assemble iPhones is a testimony to the vibrant ecosystem of the city.
Apple uses a fairly complex supply chain. The parts for the iPhone, iPad, iPod and Mac are manufactured, mostly by third parties, across 28 countries. It has 766 suppliers, of which 346 are based in China, 126 in Japan, and 69 in the US. There is one in India, a unit of Flextronics in Sriperumbudur in Tamil Nadu. For the Apple Mac, the final assembly happens in China, US, and Ireland — the last of these is Apple’s own facility — and for the iPod, China is the only final assembly location.
Apple CEO Tim Cook has called out India’s standout performance during its earnings call. The sales of iPhones grew 50% in the 2016 fiscal. Cook said that the 4G roll-out in particular could have a huge impact. There is enough headroom for growth, thanks to a burgeoning base of India’s young demography, and rising per capita income that will create a huge opportunity. India is becoming particularly important for Apple because China, which has been a huge market for the company, is faltering. Apple sold less than 3 million units last year, clocking annual sales of over $1.5 billion.
“Apple won’t be assembling in India alone, but is likely to leverage it as an export hub. But how big the facility will be or how soon they are going to expand the facility depends on how they will navigate regulatory challenges,” IDC India senior research manager Navkendar Singh said. Apple has been battling Samsung for the top slot in the premium smartphone range (Rs 30,000 and above). In the January-March quarter, Samsung replaced Apple as the top premium smartphone vendor with a 48% market share, up from 31% in October-December, showed data shared by Counterpoint Technology Market Research. Apple’s share dropped to 43% from 62%.