Apple to make iPhones in India by April as sales slow

Apple will begin assembling iPhones in India by the end of April, a regional minister has said, heightening its focus on the world’s fastest-growing major smartphone market as growth slows elsewhere.

The US company has tapped Taiwan’s Wistron Corp to put together its phones in the tech capital of Bangalore in Karnataka, said Priyank Kharge, the state’s information technology minister.

Apple executives met him in January and confirmed the timeline, he said in an interview. The start of iPhone assembly in India comes after months of speculation on Apple’s plan for the market, which is led by rival Samsung Electronics.

It signals a renewed focus on the country, where it just scrapes into the top 10, as growth begins to slow in China and other more mature markets.

Apple is said to have put forward a long list of demands in negotiations with India’s federal government, including a 15-year tax holiday to import components and equipment.

“Apple’s iPhones will be made in Bangalore and all devices will be targeted at the domestic market,” said Mr Kharge, IT minister for Karnataka, of which Bangalore is the capital.

Mr Kharge said the state will help Apple if it decides to turn to other contract manufacturers in the region.

“We did not discuss any other incentives,” he said.

Apple didn’t respond to an emailed request for comment. Chief executive Tim Cook said on an earnings call this week that India is “the place to be”.

He visited the country for the first time last May as he sought government approval for Apple to open its own stores — a step the company deems critical to developing the iPhone user base across the country.

Over the long run however, Apple needs to meet requirements that single-brand retailers source 30% of components from within India. Manufacturing locally will help with that.

Making iPhones locally could also score brownie points with the national government. Prime Minister Narendra Modi wants companies to make products in the country as part of his ‘Make in India’ policy, aimed at reaping the benefits that come from manufacturing facilities and jobs.

The company shipped 2.5 million iPhones into the country in 2016. While that was its best year ever in terms of revenues and sales, it only ranked 10th among vendors in the December quarter according to Counterpoint Research.

Apple accounts for under 2% of shipments in India, where an estimated 750 million smartphones will be sold by 2020.

Bloomberg


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