Apple bets big on India, starts making the flagship iPhone 11 locally

iPhone 11

Apple has started making the iPhone 11 in India, according to a new report in The Economic Times. The iPhone 11 is being made by Foxconn in Chennai. Foxconn is one of Apple’s three top contract manufacturers that also makes the iPhone XR at the same facility. The report adds that Apple plans to step up production in phases and maybe also looking to export made in India iPhone 11 in the future in turn reducing its dependence on China.

Apple making the iPhone 11 in India is a big win for the country especially because multiple reports in the past have suggested that Cupertino was not very keen to make newer, more expensive iPhones locally. This was attributed to a lack of supply chain and labour skilled enough to “produce the high-end, organic light-emitting diode models,” The Wall Street Journal had reported in March. A number of factors may have contributed to Apple changing that strategy now.

The move to make the iPhone 11 locally is in direct response to the government of India’s production-linked incentive (PLI) scheme that has given fresh impetus to domestic manufacturing (and assembly) of smartphones in the country. The government led by Prime Minister Narendra Modi is in fact also pushing for brands to bring their entire supply chain machinery to India and not just assemble their products here. While there’s still a long way to go for the latter, it is nice to see some much-needed progress in the former area.

There’s also the whole Sino-US angle to consider. With the growing air of unrest around China, it’s not surprising to see Apple, a US company, pushing to move more and more manufacturing outside of China and India will be without a doubt one of the beneficiaries. Same reason why, the world’s second largest iPhone manufacturer, aka Pegatron, is also setting up a base for local assembly in India (via Bloomberg).

Making the iPhone 11 locally will help Apple save 22% on import duty but whether or not it will also lead to price relaxations for customers is something that only time will tell. Apple had increased the prices of some of its iPhones in India following proposed changes made to import duty in the Union Budget 2020 — this was in March. And with the GST hike on smartphones and components coming into effect soon after, Apple had to raise the prices of its iPhones again – a second time, in almost a month. The iPhone 11 currently starts at Rs 68,300 for the base 64GB variant, going all the way up to Rs 84,100 for the top-end 256GB version. The 128GB variant of the iPhone 11 meanwhile costs Rs 73,600.

But despite all this, and despite the pandemic scare, Apple still saw a 78 per cent year-on-year (YoY) growth in iPhone sales in India in the first quarter of 2020, according to Counterpoint Research. This it apparently did on the back of the iPhone 11, which could be another reason why Apple decided to boost local assembly for this particular iPhone.

Apple is also reportedly looking to make more iPhone models in India, including the recently launched iPhone SE 2020. The original iPhone SE was also made in India before it was phased out recently.