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Apple’s India push begins with iPhone SE, But There is a Long Road Ahead

Apple, in the past months, has been trying very hard to get its iPhones manufactured started in India. After finally getting the go-ahead from the government, Apple has confirmed that it will initiate the process with the iPhone SE.

While the local manufacturing of iPhone SE is great news for Indian people as it will bring the prices down, there is much more potential for Apple in the country.

Apple plans to go all the way to manufacture a variety of products in India, which will, of course, includes iPhones. This was confirmed by Aruna Sundararajan, the Indian IT Secretary, to Economic Times. During the discussion, she stated that “Apple plans to move up the value chain to their next phase, regarding producing the entire suite of products, definitely all iPhone models, for which their whole ecosystem of partners needs to move in.”

She also said that “They (Apple) have two primary asks (demands)—one that they should be able to import the components that they need, and second that it should be cheaper for them to manufacture here than to import.”

While Apple has all these big plans, the government has not yet given a concrete response to their demands. This is because of the GST (Goods and Service Tax) that will soon be rolled out in India. Therefore, the final decision from the government can only be given after GST is implemented.

From the recent research by Counter Point, a market firm, India has now beaten the US to become the second largest market for smartphones. This transition happened last year. Counter Point also estimated that about a billion smartphones would be sold in India in the next five years. This is the main reason Apple is going all out in India. They want to seize the opportunity given the large smartphone market that India has become.

Owing to the high cost of iPhone products in India, the percentage of iPhones compared to other handsets was less than 20 percent. The majority of the phones that were sold in India cost INR 10,000 or less.

Reports have it that the Apple factory in Bangalore for the assembling of iPhone SE is set to begin operation by the ending of April or the beginning of May. CyberMedia, another research firm has also come up with estimates of 200 million smartphones will be assembled this year. This is in contrast to the 83 million locally constructed in 2016.

With Foxconn, Apple’s largest contract manufacturer, at the edge of closing a $5 billion investment deal with the government of Maharashtra in manufacturing and assembling plants in the state, Apple is planning to accelerate the progress regarding the manufacture of all its products in India.

Speaking to Economic Times, a spokesperson from Apple told them that, they have been working very hard in developing their operations in India and that they can proudly boast of delivering the best quality products and services in the whole world to their customers in India.  “We appreciate the constructive and open dialogue we’ve had with the government about further expanding our local operations,” the spokesperson said.

Owing to the fact that the Apple products are considered the best not just when it comes to smartphones, but all other commodities such as the PC, tablet, there will be a lot of positives for the company if the prices of its products are reduced. This way Apple can have a significant patronage from the second largest smartphone market.

One would expect that the Indian government will move quickly in solving the goods and services tax (GST) issue and honour the demands made by the iPhone manufacturer as regards their tariffs and import duty. Government’s speed in handling this issues will show how serious the Prime Minister is with the “Made In India” programme.

In all these, Apple is still looking confident about its exciting future in India. The Cupertino tech giant has decided to maintain a growth-oriented focus, notwithstanding the constant attack that it experiences on a daily basis. It is out to more record-breaking sales, even more than that which it recorded few months.

Good times are ahead for Apple in India, and they know it.

The Editor-in- Chief & Digital Strategist at Applesutra. When he isn’t busy devouring Apple blogs & podcasts, Varun spends his time following tennis (Vamos Rafa!), watching movies (superhero or super scary) or reading books (Audible/Kindle/old school).