Roger Fingas
Apple's Indian manufacturing will finally begin within the next 4 to 6 weeks at a Wistron plant in Bangalore — and more ambitious plans are already being hatched.
The first products to be manufactured will actually be the iPhone 6 and 6s, a government official told the Wall Street Journal. The iPhone SE will start coming off assembly lines in about 3 months.
"Almost all preparations have been done for launching Apple's first phase project in Bangalore through Wistron," the official said.
Recently Apple took the unusual move of launching a 32-gigabyte iPhone 6 in the country, presumably to deal with its main problem in growing marketshare: price. Current-generation iPhones are well beyond the means of the average person, so Apple has been keeping devices on sale in India well past when they've disappeared in other regions. The company controls less than 5 percent of the Indian smartphone market.
An analyst with CMR, Faisal Kawoosa, noted that local manufacturing will let Apple get past import tariffs and could drop the cost of iPhones by $100 or more, finally making Apple competitive with other smartphone vendors already manufacturing in the country.
The Indian government, however, hasn't yet "accepted most of the demands of the iPhone manufacturer," Trade Minister Nirmala Sitharaman told legislators in a note to Parliament on Wednesday. Earlier this year Apple delivered a "wish list" of concessions, among them a 15-year tax holiday on imported components and equipment.
"We will try to accommodate as much of their [Apple's] demands as possible, but they too appreciate and understand our limitations," claimed another official described as working closely with Prime Minister Narendra Modi.
Apple is even reportedly negotiating for the next step in its production plans, which could see it bring in more suppliers to make parts and export finished iPhones. Currently, iPhones are manufactured and exported exclusively from China.
Apple has meanwhile been negotiating to open its first official stores in India. Normally foreign single-brand retailers are required to source 30 percent of their components locally, and its current trajectory could at last meet that requirement.
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39 Comments
Can't people understand that this isn't manufacturing, it's assembly. There's a difference. Manufacturing is actually the process of making parts, while assembly is just putting them together. Assembly is the lowest value part of manufacturing.
Apple could theoretically setup an assembly line (via a local partner) in any country to appease any regulations like this. It's doesn't change the components or where they come from, just instead of shipping pre-assembled phones to India, they're shipping the parts individually and assembling them there. The cost of assembly shifts from China to India but it's undoubtedly cheaper overall, bypassing the import tariffs.
They could do similar in the USA and have "Designed in California, Assembled in Texas" for example on the devices, pleasing many 'mericans.
Neither of which is done in the US, which is shameful. Even more so is Apple seems intent on offshoring their R&D work to China too. This is not the Apple I know.
I wonder how much of the work has to be done in India to could as "assembled in India" for tariff purposes. Presumably it has to be something more than screwing the back onto an almost-complete iPhone.