Apple to Make iPhone in Bangalore, Does that Mean Cheaper iPhones

After almost a year of Crystal gazing Karnataka Govt has confirmed that Apple is finally going ahead with the iPhone assembling plant in India. Something to cheer about for Apple India Fans. Also a push for the Narender Modi , made in India initiative.

Apple assembling unit will be located in Bangalore in Karnataka, in the Peenya industrial belt.

Apple to Make iPhone in Bangalore

The news was confirmed by several sources in media and by Karnataka government as well.

Karnataka government on Thursday issued a release welcoming Apple’s proposal “to commence initial manufacturing operations” in the state.

As per the bloomberg report the manufacturing is expected to start in April 2017. Cupertino Giant has tapped Taiwan’s Wistron Corp. to assemble iPhone in the tech capital of Bangalore in Karnataka, said Priyank Kharge, the state’s information technology minister.

Apple has Less than 2% Market Share in India – Great Opportunity

India is the 3rd country after the US and China where iPhone will get manufactured. The move is seen as growing importance of Indian market for smartphone manufacturers.

It is an ideal time for Apple to expand in India as they still have abysmally low (less than 2%) market share in India. Apple shipped 2.5 million smartphones in India, in 2016 which is less than 2% of shipments.

Market is totally dominated by cheaper Android phones. Though it is maturing and future consumers would be looking for quality devices and try their hands on premium apple phones.

Apple has a significantly higher share in the US market with about 45% share while Android makers have 55% share collectively. On the other hand in China Apple has close to 8.8% revenue share and the market is dominated by Oppo, Huawei and Vivo.

Also the move could help Apple bring down the astronomical price of iPhone in India. Smartphone components imported from outside India attract a 12.5% import duty. Apple has been in discussion with the Indian government to offer a 15 year tax holiday to import equipment and components.

The benefit for India is Boost to the Made in India Campaign and job creation for the Indian Youth.

It is not very clear how much it will impact the MOP of the iPhone. But definitely it will increase margins for Apple when they will manufacture in India.

Also the iPhone 7 was launched at a higher rate in India compared to the iPhone 6s. We can expect the iPhone 8 or the 7s launch at the same price as the iPhone 7 or may be a little cheaper.

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