Apple is to start making iPhones in India this year, a local
government official said Friday, as the firm looks to tap a booming middle
class as sales in China slow.
The US giant has not confirmed the move, but chief executive
Tim Cook said this week the company intended to “invest significantly” in
India, where a pick-up in the economy provides ample opportunity for growth.
“We have an understanding with Apple and we expect them to
start manufacturing in Karnataka by the end of April,” Priyank Kharge, minister
of information technology and biotechnology in southern Karnataka state, told
AFP.
He said the new operation would likely assemble iPhones for
the domestic market.
Apple has only a two-percent share of the Indian market,
well behind rival Samsung on 23 percent, according to research firm Canalys.
However, last year it had 48 percent of the premium sector
in which phones sell for $450 and above.
Experts said manufacturing locally would reduce the
company’s costs and enable it to lower prices.
“They’re eager to be here because they’ve identified India
as a strategic focus market,” said Jaideep Mehta of research firm IDC.
“They had a fantastic 2016 in India and shipped more two
million devices to India, and now they’re looking to ultimately manufacture
here as that gives them more flexibility to respond to market changes.”
Apple currently sells its phones in India through
third-party retailers.
It is eager to open its own stores but Indian law would
require it to procure 30 percent of the components of its products locally.
It is not clear whether the Karnataka plans would help it
clear that hurdle.
Reports in Indian media said Wistron Corp., a Taiwanese
electronics manufacturer, was lined up to assemble iPhones at a plant on the
outskirts of tech hub Bangalore.
Apple outsources all its manufacturing globally.
Analysts said that if confirmed the move would be a coup for
India’s government, which has been trying to persuade foreign companies to
manufacture in the country.
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