Apple has plans to go ahead with its plans of setting up a manufacturing unit in India. To start with, it will commence its India operations by assembling about 3 to 4 lakh units of the iPhone SE model at the Karnataka plant.
The tech giant, in all probability, will go ahead with its manufacturing plans without waiting for the government’s approval for the list of tax concessions it has sought for, along with other demands.
However, the biggest factor that might act as a hurdle to Apple capturing a significant chunk of the Indian market is the price factor. In India close to 70 to 80% of the mobile devices that are sold are in the under Rs. 10,000/- segment. While this has prevented Apple from reaching its target of selling 10 million mobile phones in India by 2016 – 17, the company firmly believes that commencing local assembly and eventually scaling up to a full manufacturing unit in India will ultimately enable the company to price its products competitively, and capture a sizeable portion of the market where close to 700 million people still use feature phones.
The iPhone SE was launched in April 2016 with a lot of fanfare, with a view to penetrating emerging markets that included India, since it was priced lower than other iPhone models. However, even the lower price tag of Rs. 39,000 for a basic model of SE sounded expensive for the mass market.
Presently, the handset is retailing at less than Rs. 30,000 in India and would become cheaper still if locally produced in the country.