Tata Group is on the verge of completing a deal to acquire the Wistron factory, a prominent Apple Inc. supplier, marking a significant milestone and making Tata the first local Indian company to venture into iPhone assembly.
According to the report, Wistron has committed to shipping $1.8 billion worth of iPhones to Apple by March 2024. Additionally, the iPhone maker has pledged to triple the factory’s workforce by the following year. Once the deal is concluded, Tata Group is expected to uphold these commitments, solidifying its position in the iPhone manufacturing ecosystem.
Now that India is poised to become the centre of iPhone production in the country, users are expecting a decline in the price range ofApple’spremium products including the widely awaited iPhone 15. However, will it be the case? Not everyone agrees. Here is a detailed breakdown of whether the price of ‘Made-in-India’ will be cheaper for Indians in the coming months.
Apple to manufacture 18% of flagship iPhone in India by 2025: Report
What is iPhone’s current production in India?
iPhone exports from India have ramped up significantly to reach Rs 20,000 crore in April-May 2023, according to India Cellular and Electronics Association (ICEA).
Bank of America’s report indicates that due to India’s production-linked incentive (PLI) scheme, Apple is projected to shift 18 per cent of its global iPhone production to India by fiscal 2024-25. A report from Business Standard also cites that Apple is planning to push iPhone manufacturing in India to reach 40 per cent to 50 per cent of the total global production by 2027.
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According to Trendforce,Tata Groupwill join iPhone production in India, following in the footsteps of Foxconn, Luxshare, and Pegatron, which already have iPhone assembly plants in the country.
As per the reports, Tata Group is expected to receive orders for a smaller lot of iPhones, specifically the iPhone 15 and iPhone 15 Plus models which are likely to be released by September 2023.
Why Apple is shifting from its manufacturing backyard?
Apple is shifting its manufacturing away from China for several key reasons. Firstly, to reduce dependency on one country, China currently accounts for about 80 per cent of Apple’s global manufacturing. By diversifying production, Apple aims to mitigate risks posed by disruptions in the Chinese economy or political landscape, ensuring a more reliable supply chain.
Tata Group closes in on deal to become first Indian iPhone manufacturer: Report
iOS 16 | Image credit: Apple India
Secondly, lower manufacturing wages in countries like India and Vietnam are attractive to Apple. Rising wages in China have increased production costs, making alternative locations more cost-effective.
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Apart from that, the COVID-19 pandemic has also highlighted the importance of diversification. During the pandemic, global supply chains were severely impacted, and Apple faced challenges in production and meeting its demand. By diversifying its production to different countries, Apple is safeguarding itself against any future disruptions and enhancing resilience.
Will Made-in-India iPhone 15 be cheaper for Indians?
As per industry experts, the price for the flagship series ofiPhone 15smartphones are not expected to fall down significantly in the coming times due to increased production in India. Apple already has a strong hold on the Indian smartphone market, prices are unlikely to drop but users are still expecting some relaxation in terms of import duties.
While talking to Republic, Arun Prabhudesai, India’s leading tech influencer and CEO, Armoks Media, shared his deep insights into Apple’s pricing strategy for Indian markets. He said, “I am sure most of us are excited that Apple is ramping up production of its iPhones in India. Thanks mainly to the PLI targets set by the Govt. of India. If Apple does indeed move 18 per cent of its production here by 2025, that would be quite a shift in Global Supply Chain! But, this doesn’t mean one should expect a correction in iPhone pricing in the country. Not anytime soon at least.”
Image credit: Apple India
Apple will be able to save up 20 per cent of the import duty for Indian customers which may reduce the price for iPhones in the long term. However, any immediate change in the pricing for iPhones in India is highly unlikely.
“Apple doesn’t have to do it considering the brand perception is already fantastic here. And, deep discounting does happen for older iPhones during festive sales,” said Prabhudesai.
Despite increased iPhone production in India and potential savings on import duties, experts believe that significant price drops for the flagshipiPhone 15 seriesare not expected soon. Apple’s brand perception and exclusivity packed with second-to-none quality might not necessitate immediate price corrections.
While long-term benefits for Indian customers are possible, any immediate changes in iPhone pricing are deemed unlikely. But festive sales are always there for Indian consumers to avail discounts on older iPhone models.
Source: Republic Digital
