The latest Apple iPhones are seemingly close to being assembled in India, reveals a report by Bloomberg. Foxconn, which is Apple’s assembly and production partner for its latest iPhones, is reportedly set to commence trial production of iPhone X, iPhone XS, iPhone XS Max and iPhone XR in India, before starting full scale assembly of these devices in its assembly plant situated on the outskirts of Chennai.
Apple has been in talks with government officials in India for years now, having appealed unsuccessfully to gain some sort of concession from the heavy excise duties and stringent local sourcing norms. Having failed to do so, Apple has so far continued to import all of its latest iPhones to India, which in turn has led to incredibly high price tags, which are disproportionate with their prices abroad. For instance, the top of the line iPhone XS Max (512GB) is priced at Rs 1,44,900 in India. However, the same devices costs $1,499 (~Rs 1,00,000) in USA, showing an evident disparity in device pricing.
As a result of such astronomical pricing, Apple has failed to establish its market in India, and despite its brand’s weight, has been reduced to a minor player in the world’s most value conscious electronics market. Last year, while a total of 140 million smartphones were sold in India, Apple managed to sell only 1.7 million of them, accounting for a minuscule 1.2 percent of all devices sold.
The move to assemble iPhones locally will seemingly provide a significant pricing benefit to Apple, and allow them to reduce product prices by about 25 percent. It will relieve Apple of the 20 percent import excise on devices, and allow them to meet the target of 30 percent local sourcing norm established by the Indian government, in order to set up its own flagship stores in the country.
While assembly of the devices is set to begin soon, it will possibly be at least until end-2019, before we see the first of the India-assembled latest generation iPhones. Apple began production of the iPhone 7 in India today, slashing its MSRP down to Rs 39,990 in the country.