Although India is the world’s second-largest smartphone market, its status as a developing country means that high-priced flagship phones are not selling well in this market. That’s why when Apple started making iPhones in India in 2017, it started using low-cost iPhone SEs. The latter looks like the iPhone 5s, with a 4-inch screen and the price, is equivalent to $250 in India. Local production of the iPhone not only aligns Apple with Prime Minister Narendra Modi’s “Made in India” campaign but also helps Apple avoid import taxes of $100 per unit.
Apple stopped producing iPhone SE and has begun producing iPhone 6s in India. As early as May, we showed you the local advertising of the “Incredible” iPhone 6s, which is priced at $393. According to the “Economic Times” report, Apple is making some changes to its iPhone production plan in India. This is in line with the report we delivered last year, which said that Apple will start producing some higher-priced models in India. Contract manufacturer Foxconn’s Indian device is used to assembling the iPhone and has begun trials of the iPhone XR rolling from its Indian assembly line. By the end of this year, Apple can start producing 250,000 high-end models every month in India, and export 70% to 80% of this product to other countries. The more iPhones it can remove from China, the less Apple’s most important products will be affected by import taxes and tariffs. A person familiar with Apple’s plans said, “The commercial production of the iPhone XR and the above models will begin in Foxconn (India) by the end of this year, and exports will become part of the program from day one.”
Apple saw iPhone shipments rebound in India during April, but then ran into the new OnePlus models
At the same time, iPhone shipments in India fell 42% to 220,000 units in the first quarter. Apple did see a rebound in April, as price cuts and special deals helped the delivery volume soar to 200,000 units in the month, almost the same level that the company achieved at the beginning of the year. But in April and May, Indians switched to the new OnePlus 7 model to deliver quality products at competitive prices. Counterpoint Research expects Apple to ship 1.5 million to 1.6 million mobile phones in India this year; this will be 10% to 17% lower than last year’s 1.8 million sales, and 53% lower than the 3.2 million iPhones shipped in India in 2017. Neil Shah, director of research at Counterpoint in Hong Kong, said that “due to the price adjustments of the month, Apple’s performance in 2018 was disappointing, and the outlook for 2019 looked weak, and shipments fell further than last year, except for April.”
“Companies like Apple already have some of their global partner manufacturers in India and with the right environment and possibly incentives, can create a large-scale global hub for making in India and a deep ecosystem for component manufacturers. We are sitting on an opportunity which needs to be lapped up without losing a minute, else we run the risk of these investments going to other countries like Vietnam.”-Pankaj Mohindroo, chairman, Indian Cellular and Electronics Association
Companies that perform well in India include China’s millet, which is value for money. Samsung discovered gold with its new Galaxy A mid-range model. When the line was launched in March, Samsung sold more than 5 million units in India in the first 70 days. This has generated more than $1 billion in sales.