Apple eyes India again

Foxconn is within weeks of starting trial production of the latest iPhones in India as Apple seeks to revive its fortunes in the country.

The trial run of the iPhone X range of devices would come before Foxconn starts full-scale assembly at its factory outside the southern city of Chennai, sources said.

Wistron already produces older models, such as the iPhone 6s, iPhone SE and iPhone 7, at a plant in Bangalore. Apple has become a minor player in India with about 1% of the country’s shipments as its higher prices deter customers in the world’s fastest growing major market.

Production in India would help it avoid import duties of 20% and also meet the 30% local sourcing rule that would allow it to open its own stores in the country. “Seen from Cupertino the India market looks minuscule so Apple’s strategy has been myopic,” said Neil Shah, research director at Counterpoint Research.

They haven’t capitalised on the ground potential — India will cross half-billion smartphone users this year.

As Apple’s market share declines in China and the US-China trade war heats up, the US company needs to diversify into India. “Apple no longer wants to keep all its eggs in one basket,” said Mr Shah.

Indians bought more than 140 million smartphones last year, with just 1.7 million sold by Apple, as consumers favoured cheaper models from China. On Xiaomi’s Indian website, the Redmi Note 7 has a price of 9,999 rupees (€127), which is a 10th the price of Apple’s iPhone Xs in the country.

In the first two months of 2019, Apple shipped about 150,000 devices in India and is likely to see about a 50% drop in the March quarter from the year earlier, according to Mr Shah. The Indian assembly line of Foxconn’s Hon Hai Precision Industry would serve local and export markets before Apple announces its next iPhone models in September.

Bloomberg

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