Apple Inc will begin assembling its high-end iPhones in India through Foxconn’s local unit as early as 2019, the first time the Taiwanese subcontractor will manufacture the product in the country, according to a source familiar with the matter.
Importantly, Foxconn will assemble the more expensive models, such as the flagship iPhone X family devices, the source said, potentially taking Apple’s business in India to a new level.
The work will take place at the Foxconn factory in the town of Sriperumbudur in the southern state of Tamil Nadu, said the source, who is not authorized to speak to the media and therefore refused to be named. Foxconn, which 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, the industries minister told Reuters from Tamil Nadu, MC Sampath. The investment could create up to 25,000 jobs, he added.
Another source also said that Foxconn plans to assemble iPhones in India, which could help it and Apple limit the impact of a trade war between the United States and China.
The Hindu newspaper first reported on December 24 that the Foxconn factory would start manufacturing various iPhone models. Reuters is the first to report the size of the investment and the type of phones to be assembled.
Apple spokeswoman Trudy Muller declined to comment. Foxconn said he had not commented on issues related to current or potential customers, or any of their products.
So far, Apple, based in Cupertino, Calif., Has only inexpensively assembled the SE and 6S models in India through Wistron Corp’s local unit in the Bengaluru tech hub.
Its sales in India have also focused on low-end phones – more than half of its sales volume is generated by models older than the iPhone 8, which launched last year, according to technology research firm Counterpoint. .
Apple launched the expensive iPhone X last year, but has cut production of the phone, according to industry analysts, since it started selling the new versions, iPhone XS and XR, around the world this year.
Still, this could potentially lead Foxconn to manufacture the older version of the iPhone X in India, where it sells cheaper models in a bid to gain a greater share of the fastest growing mobile phone market. in the world. Full details of Apple’s deal with Foxconn are not yet clear and may change.
It is not known whether the entire iPhone is being moved from existing Foxconn factories in China and elsewhere. It is also unclear whether production will be limited to assembly or include component production in India.
LOOKING BEYOND CHINA
For Apple, expanding the assembly beyond China is essential to mitigate the risks of a Sino-US trade war.
Foxconn, the world’s largest electronics subcontractor, plans to set up a factory in Vietnam, Vietnamese state media reported this month. If this continues, it will be one of the biggest recent moves by a large company to secure an additional production base outside of China.
Foxconn has previously admitted that the China-U.S. Trade feud is its biggest challenge and that its senior executives are making plans to counter the impact.
“Expanding iPhone manufacturing in India through Foxconn will allow Apple to hedge the risk of any new US trade policy,” said Navkendar Singh, associate research director at International Data Corporation.
India’s taxes on the import of devices and components have also compounded Apple’s headache in a market where it only holds a 1% share of smartphone shipments.
Making more phones locally will help Apple save on expensive fees and boost Prime Minister Narendra Modi’s flagship campaign to make India a manufacturing hub, Singh said.
Apple shocked investors last month with lower than expected sales forecasts for the Christmas quarter that rocked parts suppliers around the world. Foxconn has previously expressed concern about demand for Apple’s flagship devices.