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Apple’s Supplier Confirmed that iPhone’s Production Will Start in India

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Foxconn said that the iPhone’s mass-production will start in India

Apple’s (AAPL) main supplier, Foxconn has confirmed that the company will start mass-production of iPhones in India. Foxconn’s chairman Terry Gou said that the iPhone will go into mass production in the country, later this year.

This represents a major shift for Apple, which has been manufacturing its iPhone in China for years. Apple has been producing some of the older models in India for several years in Bangalore, but will now be producing the most recent models. Apple needs to meet the 30% local sourcing law to be able to open its own stores in India.

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India has been Apple’s Achilles’s heels

The move comes as Apple’s struggles in India continue. Apple’s smartphones have a negligible market share in the country with very low income. Additionally, iPhones are more expensive in India.

The basic model of the iPhone XS costs over $1,400 in India due to lofty tariffs on luxury imports. However, local manufacturing will help the company avoid the high tariffs.

Recently, the company cut the price of the iPhone XR by 25% in India. The country is the fastest-growing major smartphone market, with growth in China being negative in the last two years.

The weakness in China was the biggest reason why Apple’s revenue shrank year-over-year in the December quarter.

However, Apple hopes that the lower prices on the iPhones, will help it gain some traction in India, where value-for-money phones like those made by Xiaomi (XIACF) are very popular. Xiaomi’s phones cost Indians about a tenth of the iPhone’s price in India.

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