Apple has signed a contract with Taiwanese manufacturer Wistron to start assembling lower priced iPhone SE models at their plant in the southern Indian technology hub of Bengaluru, according to a report by The Economic Times.
The manufacturing plant will focus solely on assembling iPhones. There are a number of reasons behind the move. Firstly, India is one of the world’s fastest growing mobile markets and has a huge population. But, up until now, Apple has been unable to compete with domestic players in a country where eighty percent of the smartphones sold are three times cheaper than the iPhone SE model. Secondly, smartphone sales in the Chinese market are slowing, which has forced the multinational tech company to look elsewhere for growth opportunities.
Apple sees local production as an ideal way to lower prices and has been in talks with the Indian federal government regarding issues such as tax concessions. However, sources say Apple will not wait for the demands of tax concessions to be accepted and will move forward with their plans in India regardless.
The Economic Times earlier this morning reported Apple planned to initially assemble around 400,000 iPhone SE handsets in India. However, an industry source told Reuters that the numbers would be substantially lower to begin with.
When the iPhone was released in April 2016, many commentators speculated that the smartphone was aimed at emerging markets, like India, as it was priced lower than all other iPhone models. However, even at that price tag, the model performed poorly in the Indian market.
While some growth was seen in emerging markets such as China and India, the lack of consumer confidence in major economies still had its toll on smartphone shipments in 2016, according to a new report from MIC.
Apple shipped an estimated 2.5 million iPhones to India last year. They ranked 10th in India’s smartphone market but let the premium segment with 62 percent of the market share. Three quarters of all smartphones sold in India were made locally, according to market researcher Counterpoint.
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