July 25 2020: Apple has commenced assembling its top-of-the-line iPhone 11 at a contract manufacturing plant run by Foxconn at Sriperumbudur, near Chennai in Tamil Nadu. The news was tweeted yesterday by Indian telecom and IT Minister Ravishankar Prasad.
The Commerce minister Piyush Goyal added his tweet: “Significant boost to Make in India! Apple has started manufacturing iPhone 11 Rs 63,900 in India, bringing a top-of-the-line model for the first time in the country.”
Apple has been slowly shifting some of the iPhone assembly to India since May 2017, when it entrusted the low end iPhone SE to a Wistron plant in Bangalore In October 2019, it assembled the iPhone XR in India, having meanwhile added two more contract manufacturers: Foxconn and Pegatron.
In his tweet the telecom minister narrated this sequence, appropriating the credit to his government and Prime Minister Modi: “2020 – iPhone 11 2019 – iPhone 7 & XR 2018 – iPhone 6S 2017 – iPhone SE This chronology is a statement in itself as to how @narendramodi govt. has developed the mobile phone manufacturing ecosystem in India. It’s only a humble beginning.”
In fact Apple never took its India opportunity seriously. Over the last two decades, it did not set up a single iPhone brand store in India – the first is not due to open till 2021. iPhone has a miniscule share of the hand phone market in India – between 2 and 3 % according to both IDC and CentrePoint (however in the premium phone category – costing more than $ 500 equivalent – the iPhone has around 63% market share). iPhones have come to India many months after their global launches and local pricies were significantly above the rupee equivalent of the dollar price.
So it was hardly likely that Apple suddenly wanted to grow the India market for its phones. More likely, it is being pressured by the Trump administration in the US to move its manufacturing out of China, a political move that may or may not outlast the government come January 2021. India seems cut out to take some of the assembly lines out of China, with contract partners already rolling out iPhones here albeit with predominantly imported components.
As a side benefit no doubt, indigenous prices of future iPhones made here can be expected from savings on customs duties which total around 20%. Ands for now it allows government to chump its chest as another Made-in-India success story. And it allowed the Economic Times to headline yesterday that “The I in iPhone 11 now stands of India-made.”