In brief: Apple has begun exporting India-made, lower-end iPhones to European countries from one of its three contractors in the country, in a move that is likely to benefit both the local economy and the companyâ€™s bottom line. Higher-end iPhones are pending approval but are expected to hit the local market as early as next month.
Apple has already started shipping the lower end but still perfectly usable iPhone 6S and iPhone 7 to some European countries, in a move that is part of the â€œMake in Indiaâ€ initiative. Neil Shah of Counterpoint research told India Times the exports are being made in quantities of under 100,000 units a month, which is to be expected as there is lower demand for the older models. Still, these account for 80% of Wistronâ€™s production capacity, whoâ€™s been assembling the two models for a year now.
With the trade war between China and the U.S., itâ€™s no secret that the Cupertino giant has been looking to offload some of its iPhone manufacturing to countries such as India. The company has been said to move up to a third of its production capacity to Wistron, Pegatron, and Foxconn – the latter of which confirmed the development with an investment of $356 million.
Apple is also seeking approvals to start shipping the higher-end India-made iPhone XR and XS as early as the beginning of August, representing a new milestone in its efforts to lower the cost of its flagships for local distributors, as well as open its own stores in the country. Still, about 70-80% of the 250,000 monthly devices produced by Foxconn in India are expected to be exported.
To put things in perspective, the move is very beneficial for Apple, who has had trouble selling its iPhones in China where local brands such as Xiaomi, Huawei and Oppo have managed to cut into iPhone sales. The manufacturing costs are said to be three times lower than in China, meaning the company could use India as more than an export hub and sell its flagships locally, where imports are subject to high taxes that make them notoriously more expensive than everywhere else.