Apple Officially Begins Assembling iPhone SE in India

[MacRumors]

After months of reports that suggested Apple was gearing up to begin iPhone production within India as a way to boost its presence in the country, a report by The Wall Street Journal today has confirmed the first ever iPhone assembly trial run completed in India earlier this month. As it was previously reported, assembler Wistron handled the iPhone production trial run, specifically focusing on the assembling of iPhone SE devices.

Apple further confirmed that it has begun the initial production of an unspecified "small number" of iPhone SE devices in its Bangalore plant, and plans to begin the first official shipment of Indian-created iPhones to local customers as soon as this month. Retail stores are expected to get their first shipment of iPhone SE handsets "as early as this week or next," according to people familiar with the manufacturing plans.

The manufacturing of Apple's cheapest iPhone model, the SE, was handled earlier this month by Taiwanese contract manufacturer Wistron Corp., which has an assembling unit in the southern state of Karnataka, a state official with direct knowledge of the matter told The Wall Street Journal.

Apple said in a statement that it has begun initial production of a small number of iPhone SE handsets in Bangalore and will begin shipping the Indian-made devices to domestic customers this month. The first devices could hit stores as early as this week or next, according to a person familiar with the matter.

The cost of the device remains unclear, with some Indian government officials hoping that the iPhone SE could be up to $100 cheaper than $320, the current average going rate for iPhone SE devices in the country. In most markets, including the United States, the iPhone SE starts at $399, but some analysts watching Apple's move in India argued for the need of an "aggressive" pricing on the smartphone in order for Apple to compete with the wide variety of cheap devices available.

Bringing its price down below $250 would help make it more affordable, analysts say, though it would still be well above the average smartphone price in India which research firm IDC says is around $150.

"Apple is likely to sell a good number of iPhones if it prices them so aggressively," said Faisal Kawoosa, principal analyst at research firm CMR. "In three to five years, these users will be able to graduate to a standard-priced iPhone."

Looking forward, some of the government officials said that Apple "could seek more production" within India down the line, potentially opening up manufacturing on other iPhones. Additionally, India is open to granting Apple more land and resources for its contract manufacturers to expand their operations throughout the country.

Last year, Apple began discussing its expansion in India with Prime Minister Narendra Modi, who was trying to boost his "Make in India" initiative, at the same time as it looked to set up a local distribution center that could help consolidate its logistics and supply chain in the country. Apple's struggles in the country have been reported to center around the iPhone's expensive price tag -- a fact that CEO Tim Cook has admitted himself -- with a Strategy Analytics report last summer outlining a total 35 percent fewer iPhone devices sold in 2016 than in 2015.

Article Link: Apple Officially Begins Assembling iPhone SE in India

 

[Howyalikdemapls]

It's surprising to me that it still makes sense to set up new manufacturing facilities for such an old device. I recognize that in that market $1,000 phones won't sell with the same gusto they do in the US, and I understand the import restrictions, but it almost seems wasteful to make brand new SEs when lots of people would like to move on to a new version of the SE and recycle their current device.

Glad to see Apple reached some agreements with India though, and hopefully that is a price that can get the device in the hands of lots of people who have been less lucky than ourselves.

 

[d5aqoëp]

iPhone SE assembly is just a trail run to gauge whether that facility can be upgraded or expanded to produce next-gen iPhones in the future. Apple wants to play it safe.

Apple manufacturing in India somehow tells me that Apple has had enough with Chinese way of doing things. Shipping costs of Indian made phones to Europe and Africa might be lower due to reduced travel distance and so on.

The main objective is to sell iPhones under Rs. 20000 ($310) in India which is an extremely cost sensitive market.

 

[Keane16]

It's surprising to me that it still makes sense to set up new manufacturing facilities for such an old device.

I imagine the plant will expand in capability going forward - diversifying Apple's manufacturing. Much like China, India has the population to staff plants like this at low cost. Something America for example can not.

I'd be stunned if this is just going to be a small scale SE only plant for the long term.

 

[JPack]

It's surprising to me that it still makes sense to set up new manufacturing facilities for such an old device. I recognize that in that market $1,000 phones won't sell with the same gusto they do in the US, and I understand the import restrictions, but it almost seems wasteful to make brand new SEs when lots of people would like to move on to a new version of the SE and recycle their current device.

Glad to see Apple reached some agreements with India though, and hopefully that is a price that can get the device in the hands of lots of people who have been less lucky than ourselves.

India is still an extremely poor country. Literacy rate and access to electricity has been stuck at 75% for years. It's a big poor country.

In 2016, India purchased over 130 million "dumb" (feature) phones which still represents the majority of phone sales. Basically, Indian consumers have yet to convert to smartphones. On the other hand, Chinese consumers are buying luxury smartphones left, right, and center.

Currently, Chinese vendors are dominating the Indian market because India has no tech base or competitive homegrown products. If Apple wants to be competitive in India, it has to lower its price.

 

[T909]

And I paid for my iPhone 5s 340€ in 2016. Unfair.

 

[pika2000]

It will be interesting with Apple planting their seeds in different countries (although many due to the requirement of the local government, like the R&D in Indonesia).
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And I paid for my iPhone 5s 340€ in 2016. Unfair.

Do you want to live in India instead?

 

[ncaissie]

Spy/Scamware preinstalled.

 

[GoldenJoe]

I was thinking about getting an SE, but I guess I can cross that off the list now. No way am I supporting India.

 

[manu chao]

iPhone production in India will almost exclusively for the Indian market (maybe also some neighbouring countries with trade deals with India). To significantly increase the iPhone sales in India Apple needs to (a) reduce prices and (b) improve distribution, and the two are closely related. For once, production in India reduces import duties (still need to pay them on the imported components) and maybe more importantly, for Apple to open its own Apple Stores in India, India requires a certain minimum percentage of local value added (I vaguely remember a number of 30%).

iPhones are very expensive in relative terms in India not only because much of India is still rather poor but also because of relatively high import duties and an inefficient, multi-layer distribution system that adds surcharges on every layer. To cut through that distribution system, Apple needs to open their own stores (or maybe at least their own wholesale organisation) which it is only allowed to do by having local production. But even the local production that Apple is now starting doesn't fulfil the 30% (or thereabouts) local value added criterion and Apple has received a time-limited waiver from the central government.

I highly doubt that iPhones produced in India for export to rich countries would be cheaper than the iPhones produced in China. Maybe the labour is cheaper but there is more red tape and higher regulatory costs and the whole production system with subcontractors, transport infrastructure is significantly less efficient than in China.

 

[d5aqoëp]

Spy/Scamware preinstalled.

That was the most ignorant comment ever and even you know it.

 

[Storm9]

India is still an extremely poor country. Literacy rate and access to electricity has been stuck at 75% for years. It's a big poor country.

In 2016, India purchased over 130 million "dumb" (feature) phones which still represents the majority of phone sales. Basically, Indian consumers have yet to convert to smartphones. On the other hand, Chinese consumers are buying luxury smartphones left, right, and center.

Currently, Chinese vendors are dominating the Indian market because India has no tech base or competitive homegrown products. If Apple wants to be competitive in India, it has to lower its price.

You are so wrong. Even though there are a lot of poor people. There is also a massive middle class of over 300 million. Also, http://economictimes.indiatimes.com...it-situation-in-fy17/articleshow/52562666.cms

Indian economy is growing very fast and this so will the middle class.

 

[JPack]

You are so wrong. Even though there are a lot of poor people. There is also a massive middle class of over 300 million. Also, http://economictimes.indiatimes.com...it-situation-in-fy17/articleshow/52562666.cms

Indian economy is growing very fast and this so will the middle class.

India is still really, really poor by any measure. Your so-called "middle class" means nothing if that class doesn't actually have money.

In 2016, the Indian population purchased 3 million cars. In the same year, Chinese purchased 28 million cars and Americans around 18 million.

The iPhone SE is meant for India and other developing economies of the world who have yet to transition to smartphones. The Bangalore plant will not be producing high end iPhone models any time soon.

 

[Storm9]

India is still really, really poor by any measure. Your so-called "middle class" means nothing if that class doesn't actually have money.

In 2016, the Indian population purchased 3 million cars. In the same year, Chinese purchased 28 million cars and Americans around 18 million.

The iPhone SE is meant for India and other developing economies of the world who have yet to transition to smartphones. The Bangalore plant will not be producing high end iPhone models any time soon.

Well you are looking at it currently, not where it is going to be. India is where china was 15-20 years ago. If I had a time machine I would invest all my money in china 20yrs ago. You should look to the future, this is just the start for apple. They are getting their feet wet and as income rise, they will have a market in 15 years for their premium products.

Other companies are investing heavily in India, do you think they stupid? While you sit here and call India poor, everyone else is going to be making money.
http://www.cnbc.com/2017/05/16/why-many-us-start-ups-are-trying-to-crack-the-indian-marketplace.html

 

[JPack]

Well you are looking at it currently, not where it is going to be. India is where china was 15-20 years ago. If I had a time machine I would invest all my money in china 20yrs ago. You should look to the future, this is just the start for apple. They are getting their feet wet and as income rise, they will have a market in 15 years for their premium products.

Other companies are investing heavily in India, do you think they stupid? While you sit here and call India poor, everyone else is going to be making money.
http://www.cnbc.com/2017/05/16/why-many-us-start-ups-are-trying-to-crack-the-indian-marketplace.html

There's hardly any indication India will turn out the same as China. Both countries emerged from WWII in the nearly the same condition, but one country clearly came out ahead.

15-20 years is a virtual lifetime for a tech company. Microsoft released Windows 3.1 in 1993. By 2013, Microsoft had lost much of its glory while Apple became dominant.

 

[44267547]

There is another form member that claims they were from India and Now reside in "Canada."

That said, I think the iPhone SE is ideal for India, because it's more of an affordable option being the adoption rate is likely low for other high-end smart phones and given the poverty rate in India, affordability is an advantage if one chooses it.

 

[Aniruddh]

There's hardly any indication India will turn out the same as China. Both countries emerged from WWII in the nearly the same condition, but one country clearly came out ahead.

15-20 years is a virtual lifetime for a tech company. Microsoft released Windows 3.1 in 1993. By 2013, Microsoft had lost much of its glory while Apple became dominant.

I see that you are wiser than the CEOs of the companies that are investing in India.

 

[vvs14]

India is still really, really poor by any measure. Your so-called "middle class" means nothing if that class doesn't actually have money.

In 2016, the Indian population purchased 3 million cars. In the same year, Chinese purchased 28 million cars and Americans around 18 million.

The iPhone SE is meant for India and other developing economies of the world who have yet to transition to smartphones. The Bangalore plant will not be producing high end iPhone models any time soon.

Number of cars purchased is hardly a yardstick. I hate it when people who know very less about a country spew their ignorance on public forums. Its simply not practical to use a car on congested Indian roads. Also, commuting distances are much smaller which makes two wheelers a much more practical alternative. Guess which country is the biggest two wheeler market in the world? This still does not mean Apple will sell a lot of iPhones in India. There are just way too many quality options available at a much lesser cost.

 

[Aniruddh]

Honestly, if you notice. None of the thread related to India goes without bashing.

I don't understand this strange obsession.

 

[vvs14]

I was thinking about getting an SE, but I guess I can cross that off the list now. No way am I supporting India.

Oh my god... There is no way India can survive without your support.

 

[JPack]

Number of cars purchased is hardly a yardstick. I hate it when people who know very less about a country spew their ignorance on public forums. Its simply not practical to use a car on congested Indian roads. Also, commuting distances are much smaller which makes two wheelers a much more practical alternative. Guess which country is the biggest two wheeler market in the world? This still does not mean Apple will sell a lot of iPhones in India. There are just way too many quality options available at a much lesser cost.

Thanks for proving my point.

Somehow, "traffic congestion" allows Chinese to purchase 28 million cars but India only 3 million.

But let's not let facts get in the way. I'm sure Indian consumers have plenty of disposable income. They just don't show it by purchasing smartphones or passenger vehicles. Talk about cognitive dissonance.

• Poverty Retreats in India, but the Middle Class Barely Expands, Pew Research Center
• The myth of the great Indian middle class, The Globe and Mail

.

 

[Aniruddh]

Thanks for proving my point.

Somehow, "traffic congestion" allows Chinese to purchase 28 million cars but India only 3 million.

But let's not let facts get in the way. I'm sure Indian consumers have plenty of disposable income. They just don't show it by purchasing smartphones or passenger vehicles. Talk about cognitive dissonance.

• Poverty Retreats in India, but the Middle Class Barely Expands, Pew Research Center
• The myth of the great Indian middle class, The Globe and Mail

.

Take it this way. 5% of Indian population is equivalent to total population of United Kingdom.

So, let's say if India is super poor that only 5% of population can purchase an iPhone. But Apple thinks, why not add another UK to our list?

Got the math?

 

[JPack]

Take it this way. 5% of Indian population is equivalent to total population of United Kingdom.

So, let's say if India is super poor that only 5% of population can purchase an iPhone. But Apple thinks, why not add another UK to our list?

Got the math?

I'm not sure why you need to prove your elementary math skills to everyone.

My original reply was to someone asking why Apple was assembling an old iPhone model in India. My reply was, in India where poverty is extremely high, most people don't even have smartphones to begin with, much less an iPhone SE. Then came posters who tried to dismiss the fact that India was poor.

Do you need any more help following this thread?

 

[kdarling]

It's surprising to me that it still makes sense to set up new manufacturing facilities for such an old device.

Like China, India has smartly pressured Apple (and others) to invest a ton in "R&D" facilities and in this minor factory, in exchange for possible favors such as opening stores, etc. See below.

I recognize that in that market $1,000 phones won't sell with the same gusto they do in the US, and I understand the import restrictions, but it almost seems wasteful to make brand new SEs when lots of people would like to move on to a new version of the SE and recycle their current device.

Apple first tried to get permission to sell refurbished iPhones in India last year, but was denied.

Now, they're trying again. Who knows, maybe Apple has bribed... errr... invested... enough this time around.

 

[Aniruddh]

I'm not sure why you need to prove your elementary math skills to everyone.

My original reply was to someone asking why Apple was assembling an old iPhone model in India. My reply was, in India where poverty is extremely high, most people don't even have smartphones to begin with, much less an iPhone SE. Then came posters who tried to dismiss the fact that India was poor.

Do you need any more help following this thread?

No need to get offended when I talk about numbers.

I see a clear bashing in your statements.

The math was required here because there are many people like you who thinks that they are wiser than CEOs of these companies.

It's a tech forum, social issues won't help anyone here.

My reply was, in India where poverty is extremely high, most people don't even have smartphones to begin with, much less an iPhone SE.

When you do business, numbers are important not penetration rate. Smartphone users in United States are 226,289,000 and in India they are 300,124,000. So Apple wants most of these users in userbase.
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Now, they're trying again. Who knows, maybe Apple has bribed... errr... invested... enough this time around.

They are still seeking from Government of special tax incentives for next 15 years.