Apple to roll out manufacturing unit in Bengaluru

Will iPhones made in India become more affordable?

Business & Politics

News - Biz@India

December 30, 2016

/ By / Kolkata

Apple shows strong intent to 'Make In India'

Apple shows strong intent to ‘Make In India’

Apple will soon be manufacturing iPhones in the South Indian city of Bengaluru to address the demand in India; however, the strategic move also sparks few imperative questions.

As the Indian government vigorously promotes India as an encouraging site of business development and manufacturing, Apple specifically has communicated a lot of enthusiasm considering India to be an extremely lucrative market for its portfolio. The new facility will reportedly start production from next April, according to industry sources. The US-based tech innovators are seemingly in conversation to set up authority Apple-marked stores and are looking for help and concessions from the legislature in such manner.

Although the majority of smartphone users in India are yet to have an Apple ID and are more comfortable on Android devices, Samsung leading the way, the latest move is believed to make iPhones more affordable for the growing number of smartphone tribes in India. Experts believe that manufacturing in India will chop down the cost of the iPhone, which is critical when you consider that Apple’s iPhones are sold at a noteworthy premium price in India here. The additional 12.5 pc duty levied on importing Apple products can be avoided if made in India and consequently the cost.

This will be Apple’s second big announcement for Bengaluru. In May, Apple announced a design and development accelerator in the city to grow the iOS developer community and also, to guide Indian developers to leverage Apple’s programming language Swift and build apps for Apple TV and Apple Watch. The facility will open early next year.

The Bengaluru manufacturing facility underscores India’s importance for the Cupertino-based company. The mushrooming middle class in India have spurred the visit of Apple CEO Tim Cook’s multi-city India tour earlier this year had signalled the growing importance of India powered by the demand for Apple products. According to the data furbished by Hong Kong-based Counterpoint Technology Market Research, Apple sold 2.5 million iPhones in India from October 2015 to September 2016, a rise of more than 50 pc over the year-ago period.

India is thus not just a potential market for Apple but a profit making site. The income numbers represent themselves as Apple India reported a sales figure touching INR 99.97 billion (EUR 1.4 billion) in 2016, up 56 pc from INR 64.72 billion (EUR 903.2 million). The organisation’s net benefit grew 21 pc to INR 2.94 billion (EUR 41 million) amid a similar period with more profound retail entrance and lower costs for more seasoned iPhone models that collected a colossal client base.

Bengaluru, the only city in India and the second from Asia made it to the Global Startup Ecosystem Ranking – a list compiled by Compass and ranking cities on their ability to produce and support great startups. In fact, judging by the report, Bengaluru only ranks behind Berlin in terms of growth in the startup space and is the seventh largest investment destination in the world. Moreover, the city is the hub to some of the youngest tech entrepreneurs in the world with an average age of 25 versus the Silicon Valley engineers averaging 36.

The new manufacturing units and the growing interest of Apple to penetrate the Indian market looks purposeful, but acceptance of iOS in the Indian market is still a major challenge for the Cupertino-based tech troupe.

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