NEW DELHI: Apple has started to export iPhones to some European markets from India, three people aware of the development said, a move that boosts the government’s Make in India plan and is another step in the iconic smartphone company’s efforts of making India an export hub.
The Cupertino-headquartered company’s contract manufacturer Wistron Corp’s India arm, which first started assembling iPhones in the country back in 2016, has become the first of Apple’s contract makers to export the smartphones, from its facility in Bengaluru.
“iPhone 6s and iPhone 7 are being exported in quantities of under 100,000 units a month,” said Neil Shah, research director at Counterpoint Research, citing export data that the firm tracks.
“The exports have begun a few months ago to European markets,” he added.
The other two people, who are senior executives in the industry said that the export volumes were about 70-80% of the total capacity at the facility. Wistron has been making iPhone 6 since the year before and iPhone 7 since the beginning of this year.
Emails to Apple and Wistron Corp did not elicit a response as of Wednesday evening.
The move to use India as an export hub would bear well for both the country and Apple. While it would cement India’s position as an attractive destination for foreign investment for not just domestic market but also exports, Apple would benefit by fulfilling requirements for other markets from outside China, it’s largest base for contract manufacturing for iPhones.
Apple has already asked its suppliers including Wistron, Foxconn and Pegatron to look towards moving 30% of their production to locations outside China, owing to the ongoing US-China trade war.
In fact, industry watchers believe Apple is treating India more as a production hub than a significant market. ET recently reported that the company is likely to start manufacturing its higher-end phones locally through Taiwanese contract manufacturer Foxconn, with an initial monthly capacity of 250,000 devices. And about 70-80% of the output may be exported.
The manufacturing and export moves come even as its market share in the country, an extremely price sensitive one dominated by Chinese players such as Xiaomi, Vivo, Oppo and Korea’s Samsung, is barely around 1%, and by value, around 3%. Apple though has a higher volume share in the premium segment, or over Rs 30,000, at 18%, trailing China’s OnePlus and Samsung.
But its local business will also benefit from scaling up manufacturing operations, helping it avoid import duties, thus allowing it to price its devices lower, or invest the cost savings in its retail chain. Besides, scaled-up local manufacturing could help Apple meet local sourcing norms that are a pre-requisite for opening its own stores in India.
Source: Economic Times