NEW DELHI: New DELHI: Apple has started fabricating the iPhone 7 model in India, in addition to iPhone SE and iPhone 6s, thus widening its ‘Made in India’ portfolio and signalling its intention of developing the country as a manufacturing hub. “We are proud to be rendering iPhone 7 in Bengaluru for our local clients, furthering our long-term commitment in India, ” said Apple in an e-mail to ET exclusively.Taiwanese contract manufacturer Wistron, which constructs iPhone SE and 6s models out of its plant on the outskirts of Bengaluru, has been building the iPhone 7 devices in India since the beginning of March.People familiar with the matter said that a price drop-off for the iPhone 7 is unlikely with analysts saying the company will invest the margins made from these devices into a more aggressive marketings and marketing play.
The cost of making iPhone 7 devices in India is cheaper than importing them due to the duty concessions any handset maker gets on local manufacturing, a move aimed at providing boosting the government’s Make in India initiative.Apple’s latest move comes after Wistron recently received the government’s acceptance for its Rs5, 000 -crore proposal to expand its manufacturing capabilities with the aim of locally rendering high-end Apple devices.“iPhone 7 is a low hazard kind of product for Apple to make out of India. To that extent, it( local manufacturing of iPhone 7) is about revalidating Apple’s India manufacturing capability before they scale up to other models, ” said Navkender Singh, research director at IDC India.He added that Apple will construct more money at the same cost phases, owing to higher margins now.“They will use the funds in their channels, for market development intents most likely, ” he said, ruling out price cuts. “Apple is cost conscious.”Apple is coming off its weakest year- 2018- since 2014 and has revamped its management team and sales strategy, with analysts saying it’s clear that the company is planning to treat India more as a manufacturing and exportation hub- also in the background of the China-US geopolitical pressures – rather than a destination for its products’ marketing. The high prices of Apple’s devices and rivalry from Chinese players offering advanced features at far less prices meant Apple’s market share in India sunk to around 1.2% in 2018, from 2.4% in 2017. Singh said that locally fabricating the iPhone 7 won’t drive up Apple’s volume marketings in India in 2019- which are again is predicted to be “sluggish” – but it is more about testing waters in the manufacturing segment for high-end Apple phones”.As per news reports, the company seems to be planning to phase out iPhone 6 and 6s from the Indian marketplace, and this could mean that iPhone 7 now becomes the entry level model for India, he added.Talking about India as a market for Apple as a whole, Singh said that while the device segment remains hard to cracking for Apple, it will be interesting to see the launch of the company’s content services. “We think it will take some time for Apple to launch its video streaming service in India. It could easily be a year before we watch Apple’s video content in India”. Apple last week launched a television and movie subscription service, a charge card, and a digital video game arcade as it sought to reposition itself as an amusement and financial services company, which also makes smartphones.
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