Foxconn will start flagship iPhone production in India
Diversifying manufacturing could help avoid tariffsBy Greg Synek
The big picture: International trade policies have been heated over the past several months, leaving uncertainty over which technology products will be subject to further tariffs. Foxconn's expansion of Indian production facilities will help Apple gain traction in another market and protect the company from trade war fallout.
Starting as early as 2019, Foxconn is about to begin production of top iPhone models in India. The most expensive Apple phones such as the iPhone X, XS, and XS Max are expected to be built in Foxconn's Striperumbudur plant located in southern India.
An investment of approximately $356 million will be made to expand Foxconn's plant. Up to 25,000 new employees will be hired as part of the initiative.
Up until this point, Apple has only had the iPhone 6S and iPhone SE manufactured in India. Sales within the country have always trended towards older models that are less expensive. Currently, more than half of iPhones sold in India are older than the iPhone 8.
Even though Apple has cut production of the iPhone X, there are reasons to believe that the Indian market may be a place where it remains relevant. Producing an older generation with lower cost components could give Apple better footing in a market where price is often more important than marketing and branding.
It is not currently known whether Apple is pulling out of any factories in China or if this is simply an addition of manufacturing capabilities. Foxconn does not comment on work done for clients and would not confirm if Apple will produce any components in India or merely assemble iPhones.
In addition to expanding its presence in India, Foxconn is also looking to build a factory in Vietnam. Should those plans come to fruition, Apple will have a few more options outside of China to produce future generations of the iPhone.