Apple’s manufacturing arm Foxconn Technology is reportedly in talks to open up an assembly plant in India, in a bid to reduce production costs, drive sales growth and profit margins in the market, according to Reuters. The report says that Foxconn will set up a manufacturing facility in India to produce iPhones and iPads , for both domestic as well as international markets.
Notably, the report also mentions that Maharashtra industries minister Subhash Desai is in talks with government on a proposed plan to build a Foxconn production facility, which would eventually help the company lower its prices in the world’s number three smartphone market – India. Moreover, thereby gain leverage over rivals like Samsung and other domestic manufacturers.
“Foxconn is sending a delegation of their officers to scout for locations in a month’s time,” Subhash Desai told Reuters.
Lately, Foxconn has started showing interest in other key international markets to strategically expand around the world. India could serve as a platform to help Foxconn counter accelerating wage inflation, where the majority of iPhones are made. Apple is among Foxconn’s biggest clients, who also makes components for companies including Xiaomi, Acer and Sony.
Apple could get more aggressive with its pricing in the country with reduced production costs, where rival Samsung and domestic manufacturer Micromax rule the roost.
“The smartphone boom in India indicates the time is just right to focus on expansion plans and increasing volume in India to a comparable level with the China market in the next five years,” said Sky Li, vice president of phone manufacturer OPPO.
Though the country still lacks the robust infrastructure and adequate suppliers posing as the biggest hurdles to producing technology products in the country. Which is essentially the reason most of Indian phone manufacturers are left with no options and forced to get their products from markets like China and Taiwan.
The Cupertino giant can definitely boost sales in India through tie-ups with resellers and including payment plans to mitigate the up-front cost. There’s a huge amount of interest for Apple products in India, though exorbitant price point still poses a significant road block.
Apple commands a 10 percent market share in India, lagging behind Samsung and other domestic manufacturers, according to Counterpoint Research Market Monitor.
While according to Cisco Systems, there’ll be 650 million smartphones in India by 2019, while the number of tablets by then is expected to rise by 9 percent to 18.7 million.