India is set to become the third country in the world which shall be assembling the Apple iPhones next to China and Brazil.
Apparently, the American tech giant has seen that India is its fastest-growing market for its iPhones and other devices that it has set out a plan to assemble iPhones in the city of Bangalore, regarded as the Silicon Valley of India, reports Tech Viral.
According to reports, the manufacturing of iPhones will start in April this year and Apple shall be putting it in effect through a partnership with Taiwanese smartphone manufacturer Wistron, which plans to open an assembly plant in Bangalore.
While there were speculations that Apple could manufacture the iPhones in India via Foxconn, also a Taiwanese firm, which is also doing the same for the American tech giant in China, Apple saw that Foxconn was also doing the same with other brands of smartphones so it decided to pick Wistron instead.
Analysts believe that the Indian government needs to promote and encourage production in the country to give impetus to entrepreneurship in the market, because currently, India imposes heavy taxes on electronic products like smartphones which are being imported into the country.
Circumventing costly Indian import tariffs
Establishing a presence in India would be critical for Apple because it would tap directly into the local market and thus circumvent import tariffs, and thus allow a possible reduction in the prices of iPhones in the local Indian smartphone market.
In December, Apple sent a letter to the Indian government, expressing its strong desire to make smartphones and other products in the country, but hoping to get some tax incentives from the government.
Sometime in May last year, the American tech giant also announced the installation of an accelerator design and development in the city to encourage the developer community iOS and also to guide Indian developers to take advantage of the programming language Apple Swift and create applications for Apple TV and Apple Watch.
Early last year, Apple CEO Tim Cook highlighted the deep and growing interest in India for the company because of its increasing demand for Apple products which is in stark contrast to what is happening on the iPhones in China.
A fairly complex supply chain
Because of its reputation as one of the world’s largest smartphone manufacturers, Apple actually uses a global and fairly complex supply chain.
The parts for the iPhone, iPad, iPod, and Mac are manufactured, mostly by third parties, across 28 countries. It has 766 suppliers, of which 346 are based in China, 126 in Japan, and 69 in the US, details the Times of India.
While Apple already has a supplier in India, the unit of Flextronics based in Sriperumbudur in Tamil Nadu, it is not clear what the unit makes for the American tech giant.
Some parts made by these suppliers are sub-assembled in certain locations. All the sub-assembled units and other parts are brought together for final assembly in either China or Brazil in the case of iPhones.
For the Apple Mac, the final assembly happens in China, US, and Ireland, the last of these is Apple’s own facility, and for the iPod, China is the only final assembly location.
With India becoming one of the world’s biggest smartphone markets and one of iPhone’s fastest growing markets, Apple has decided to assemble the iPhone in India.
The products from the Wistron facility in Bangalore are expected to be available in the domestic market towards the end of next year.
Wistron has three supply facilities for Apple and an iPhone final assembly unit in China.
Jaipal Singh, a market analyst at research firm IDC, said that an assembly unit does not require big investments.