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What just happened? India’s Minister for Commerce and Industry Piyush Goyal has confirmed reports that Apple is manufacturing the iPhone 11 in India. It’s an easy victory: Apple has reduced their reliance on China, and they can bypass India’s significant import tax.
Apple has wanted to produce devices in India for several years. According to TechCrunch, they had been unable to find a local manufacturer capable of meeting their stringent quality standards, so they’ve had to wait for new assembly lines to be built. In 2017, Wistron began producing previous years’ flagships in India to sell as budget devices, but as of this month, Foxconn has been able to produce the iPhone 11 at their facility near Chennai. The first batch is believed to have already shipped to nearby retailers.
Apple CEO Tim Cook announced in February that Apple will launch an updated online storefront in India in the next few months, and will open brick-and-mortar stores next year. Recently, Apple’s manufacturers Foxconn and Pegatron both announced plans to invest in their Indian facilities. India is the world’s second-largest smartphone market and one that’s much further from saturation than America or China.
There’s one key question that remains, though. Apple won’t have to pay a 20% import tax anymore. Although manufacturing in India is probably more expensive than manufacturing in China, Apple will still be saving a fortune. Will they pass those savings onto consumers and give them a discount, or will they widen their profit margins?
Image Credit: Jason Leung on Unsplash