Apple Inc’s reported move to begin assembling iPhones in India aims to boost its development in the market, but analysts said it will not affect the company’s manufacturing partners in China thanks to their high quality and excellent skills.
Apple is set to make iPhones in India by April in Bengaluru, Karnataka and Taiwan’s Wistron Corp will operate the plant, Bloomberg reported Thursday, citing the state’s information technology minister Priyank Kharge.
“Apple’s iPhones will be made in Bengaluru and all devices will be targeted at the domestic market,” said Kharge.
The move is only to expand its presence in the Indian market, as it may be the company’s next growth engine and its labor costs are low compared with China, said Zhu Dalin, an analyst with IT research firm Analysys International.
In 2016, 2.5 million iPhones were shipped into India, but the company only ranked 10th among sellers during the fourth quarter of the year, said the Bloomberg report, citing Hong Kong-based technology research agency Counterpoint Research.
India’s high import tax is another factor prompting Apple to set up plants in the country, according to Wang Yanhui, head of the Shanghai-based Mobile China Alliance. To encourage international companies to manufacture in India, the government raised the import tax on mobile devices to more than 10 percent, he said.
However, Apple’s move will not have a serious impact on its manufacturing partners in China, Zhu told the Global Times Monday. “China is a large market for the company and its Chinese partners’ high quality and excellent skills make the country a focus of the company,” he explained.
An employee of Foxconn in Zhengzhou, Central China’s Henan Province, told the Global Times on condition of anonymity that Foxconn may not be affected as it is still increasing production facilities in the city.