A Taiwanese contract manufacturer, Wistron has already completed assembling small numbers of iPhone SEs as a trail run in the Karnataka production facility. The manufacturers will start shipping these iPhone SEs to the domestic customers later this month.
However, the the Cupertino Giant has not started full-scale production yet. Apple will start manufacturing iPhone SE on a larger scale in India as a part of Make-in-India, later this year, at their Karnataka production unit. The company is looking for more clarity on the goods and services tax (GST) rollout before it starts the manufacturing process.
"We are beginning initial production of a small number of iPhone SE in Bengaluru. iPhone SE is the most popular and powerful phone with a four-inch display in the world and we'll begin shipping to domestic customers this month," Apple told IANS in an email.
The most obvious and consumer-centric change will be in the pricing of the iPhones manufactured in India. The 4-inch phone is powered by an A9 chip that's also used in iPhone 6S and comes with a 12-Megapixel camera.
The company will benefit out of lower taxes and no custom duty will directly impact the prices of the devices. In 2016-17, total value of mobile phone to be produced in India is likely to reach Rs 90,000 crore from Rs 54,000 crore in 2015-16.
Apple has been under severe pressure as the Chinese phone makers have captured most of the Chinese Smartphone market.
In the second quarter, Apple reported 14 percent decline of sales in China. After losing its grip over the largest Smartphone market in the world, Apple is trying to hold on to India, the second largest Smartphone market after China. India will be only the third country globally to assemble iPhones. Apple has been battling Samsung for the top slot in the premium Smartphone range (Rs 30,000 and above).
Will production of Apple phones in India reduce their cost in our market?
In 2016, Apple products were most expensive in India. There are a couple of reasons why this is the case. Firstly, the American company needs to pay heavy custom duty while importing their products and secondly, they have to rely on a heavy network of retailers in India which ultimately reduces their profit margin in the country. To maintain that margin and keep a buffer between weakening rupee and their desirable profit, the company has prices higher than other countries. The prices are to come down once it starts manufacturing in India.
No matter how big a company, ignoring the Indian market can be a detrimental move for any international Smartphone brand and Apple does not want to be left behind in the second largest Smartphone market. The company will definitely face the onslaught of Chinese smart phones as competition but the revised prices might give its sales the required boost.