Apple has reportedly started commercial production of the iPhone XR in India. The Cupertino-based company has started building the device locally at the Foxconn facility near Chennai. The commercial production begins after undertaking trials for several weeks and shows Apple’s interest in turning India into a manufacturing hub. The locally made iPhone XR will be exported to other markets. The company started making the iPhone 6s and iPhone 7 locally in India and exported the devices to Europe.
Apple now aims to make India one of its key global production hubs. According to a report on Economic Times, the company makes assemble latest flagship iPhones as soon as they become available globally. The shift in production to India will help Apple, which stands at the cross hair of ongoing trade war between the US and China. The local production of iPhone XR is expected to be followed by manufacturing of latest iPhone 11 models in the country. The report notes that local production of iPhone XR will help Apple save around 20 percent in import duty.
However, Apple is not expected to lower the price of iPhone XR as a way to pass on benefits to customers. The iPhone maker now has two of its major contract manufacturers in the country. Taiwan’s Wistron has been assembling iPhone models such as iPhone SE, iPhone 6S and iPhone 7 locally at its facility in Bengaluru. US President Donald Trump recently announced additional tariff on Chinese imports which included Apple devices as well. However, the government pulled back from imposing those tariffs after Tim Cook met Trump at the White House.
Apple is reportedly investing $1 billion to start assembling iPhone in India. Ravi Shankar Prasad had said last month that Apple is coming to India with big business plans. The Foxconn plant in Chennai is the biggest manufacturing hub for Apple in India. The plant will reportedly have the capability to manufacture the iPhone models priced more than Rs 1 lakh in the country. For Apple, the iPhone XR has been the best selling smartphone in India in the past six months. After it received a price cut, the device has helped Apple revive it sales in the world’s fastest growing smartphone market.
The report also notes that Apple’s global suppliers such as “Flex Ltd, Salcomp Plc, Sunwoda Electronic Co, CCL Design (Suzhou) and Shenzhen Yuto Packaging Technology Co. have set up base in India”. These suppliers are manufacturing parts and accessories such as chargers and battery packs locally for iPhone. The iPhone 11’s competitive pricing has also helped the company sell the device in record numbers. The company is estimated to have 2 percent market share in the Indian smartphone market.
However, it competes aggressively with OnePlus and Samsung in the premium smartphone segment. The government wants Apple to use India as an export hub. The expanded local manufacturing of iPhone models will allow Apple to meet the 30 percent local sourcing norms. This will allow Apple to set up retail stores in the country. The iPhone maker is reportedly planning to open three retail stores in the country and plans to establish online sales first.