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As Apple Moves In, Is it a New Day for India’s Economy?

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Bangalore, India

Bangalore, India

For the first time, Apple will be producing iPhones in India in the next month or so. Apple will be working with the Taiwanese manufacturing firm Wistron to build iPhones in Bangalore. Rajesh Roy and Newley Purnell report that Apple is looking for Indian production to lower the cost enough to make iPhones affordable for Indian consumers who have so far been cool on the phones. Apple will also avoid Indian import tariffs by producing locally.

With sales cooling in China, long an engine for Apple’s growth, manufacturing iPhones locally would help Apple address what analysts say is its biggest problem in India: its smartphones are simply too expensive for the vast majority of people.

Smartphone shipments in India grew 18% last year, compared with 3% globally, according to Counterpoint Research, but the majority of phones sold here cost less than $150.

The iPhone SE, which some online retailers now sell for as low as $330, is still out of reach of most Indian consumers.

“Apple realizes that the phones are priced way too high for the Indian market,” said Kiranjeet Kaur, an analyst at research firm IDC.

Making the phones in India would allow Apple to lower prices by at least $100 as its import tariff bill comes down, said Faisal Kawoosa, an analyst at research firm CMR.

Read more here.

 

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Dick Young

Richard C. Young is the editor of Richard C. Young’s Intelligence Report, and a contributing editor to both Richardcyoung.com and Youngresearch.com.