Tech Telecom

With the Karnataka government saying it welcomes Apple’s move to start ‘initial manufacturing’ from Bengaluru, it is almost certain that the tech major is all set to start production in India.

India is a crucial market for Apple in terms of future growth, especially with the US, Europe and China markets pretty much saturated by now. It would not have been an easy decision for Apple, given that it will have to source about 30 percent or inputs, locally. How they cross this hurdle will be interesting, especially since the company has sought exemption from this norm. There is a possibility that the government might actually grant a concession given that getting Apple to make in India will be a badge the present Modi government can wear proudly on its sleeve.

“There is no component ecosystem in the country besides what Samsung has done in India. With Apple’s China sales slowing down, it’s opportunity India, and Apple might look at a different SKU, distribution and sourcing model to make it affordable to millions of aspiring customers,” said Navkendar Singh, senior research manager – mobile devices research, India and South Asia, in research firm IDC.

Actual manufacturing is much easier, given that both Foxconn and Wistron Corp are already in India. In fact, Apple seems to have decided that Wistron Corp will be the first to make the iPhone in India, most probably the iPhone SE if reports are to be believed. The Taiwanese company is known to have manufactured the iPhone SE and the iPhone 5, both of which have similar chassis.

Apple uses a 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. There is one in India, a unit of Flextronics in Sriperumbudur in Tamil Nadu.