Apple iPhone mass production is shifting from China to India — solving a key problem for the company
- Apple's top manufacturer, Foxconn Technology Group, is shifting its manufacturing lines to India for mass production.
- The chairman of Foxconn,
Terry Gou, stated that India has a “very important role” to play in the smartphone industry.
- Increasing production in India could finally mean that Apple can source 30% of its materials locally, making the company eligible to open its 'Apple Stores' in the country.
In the future we will play a very important role in India's smartphone industry. We have moved our production lines there.
And manufacturing iPhones in India would solve a problem that Apple has been struggling with for years — opening its exclusive 'Apple Stores' in the country. The issue has always been that Apple needs to source at least 30% of its material in India, a target it has continuously failed to meet.
We'd like to put stores there (India). We would like some of the duties and so forth that are put on the products to go away. And we're working closely with the team there.
Earlier this year, the company announced its plans to roll out Flagship Apple Premium Resellers (FAPR) in the four cities that have the largest demand for Apple products — New Delhi, Mumbai, Bengaluru and Chennai.
While other brands, like Xiaomi and ASUS, jumped on the '
Crossing from East Asia to South Asia
Apple has been struggling in China as the country's GDP growth slows down and in December 2018, the manufacturing sector was seen contracting for the first time in 19 months.
While the US-China trade war is partially to blame, competition from local players like Huawei and the slowdown in upgrade cycles are also contributing factors.
One of those factors, weak macro-conditions in some emerging markets, was significantly more severe than we originally foresaw, especially in Greater China. That challenge was compounded by quarterly iPhone upgrades that were lower than we anticipated.
In simple terms, it's more expensive to manufacture in China and the demand for iPhones is slowing down. In India, on the other hand, the smartphone market is the fastest growing among major markets according to Counterpoint.
But, for Apple, the landscape hasn't been much rosier in the South Asian Country. Its market share has been dipping since Xiaomi and OnePlus started to aggressively price their products to offer higher specs at lower prices.
Nonetheless, India continues to be a critical market for India according to experts. Sources had previously reported that the 'Made in India' iPhone X — Apple's high end device from its latest launch — would begin production in Foxconn's Chennai plant in southern India.
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