Apple wants to Make iPhones in Bengaluru from April: Is it really possible?
- Apple was reported to be in talks with the government to Make in India.
- Its OEM is now said to be setting up a facility in Bengaluru.
- The production is said to start in April 2017
FollowApple has joined the bandwagon of companies that want to 'Make in India.' Citing industry sources, a Times of India report reveals that Wistron, a Taiwanese OEM maker for Apple is said to be setting up a facility in Peenya. Peenya is the industrial hub of Bangalore.
You may not have to wait too long to own an iPhone 'Made in India' as the production is expected to begin no later than April 2014. But let’s get this straight first – most of these companies are assembling the devices in India, and not manufacturing. We can’t manufacture a device here because we don’t have the infrastructure or ecosystem to do so, yet. ‘Make in India’ and ‘manufacture in India’ are two very different things at the moment.
The report adds that Apple is seriously considering Bengaluru for assembly operation that will begin in April, and after that 'full manufacture' to begin by the end of the year. So, will we have environment to start manufacturing by end of next year?
Why Apple wants to Make in India and is it possible?
Apple witnessed its first dip in revenue in over a decade last year. Post the dip, the company has started looking beyond its stagnating US and other markets towards emerging markets like India. After ignoring India for years, lately Apple has been realising the potential of tapping on the Android dominated Indian market.
But the high price tags that the iPhones carry are the biggest hindrance to woo 'value for money' Indian audiences. The company did try to sell its 'refurbished iPhones' here at lower prices, but government authorities ensured that the Cupertino Company doesn't make India its dumping ground. By setting up local manufacturing units in India, the prices of the iPhone could drop as the 12.5 percent additional duty on full imports can be avoided. China, over the years, has created favourable conditions for companies as it has a buzzing components industry and in addition cheaper labour.
While manufacturing seems like a far-fetched dream as we lack the ecosystem to do so. However, there is no denying that device assembly is a positive step towards the big dream. It would lead to rise in locally sourced components as OEMs would look at cutting down the cost on transportation of these components and other related factors. This would eventually give a push to building components here.
Meanwhile, Indian Cellular Association (ICA) that represents phone makers like Samsung, Apple, among others, have been asking for components made in India like USB cable, keypad, mic, receiver, die-cuts to have lower duty costs. Moreover, handset makers have also begun asking the government for relief on duties and levies that are imposed on mobile components, just ahead of the Union budget. All of this would help bring down the cost of manufacturing components.
It is also known that Apple's biggest OEM, Foxconn is also planning to setup a manufacturing plant in Maharashtra. But, Apple seems to be taking Bangalore, the IT city of the country very seriously as reports have been circulating about the Apple leasing 50,000 sq ft office space in Bengaluru.
However, manufacturing or a 'true make in India' product would be possible only if the government creates conductive conditions here which would attract companies to setup manufacturing plants.
