In a fresh development, Apple has revealed it begun production of an initial batch of iPhone SE units in Bengaluru. The first smartphones produced in the country will be made available to domestic customers in May itself, the company added.
"We are beginning initial production of a small number of iPhone SE in Bengaluru. iPhone SE is the most popular and powerful phone with a four-inch display in the world and we’ll begin shipping to domestic customers this month," Apple said in a statement to Gadgets 360.
News of Apple assembling its first batch of iPhone SE units in India was first reported by the Wall Street Journal, adding that the work was being carried out at Taiwanese contract manufacturer Wistron's plant in Bengaluru. This development shows Apple’s efforts to make its mark further in the Indian market, at a time when smartphone sales growth is slowing down.
Apple wants to bring its component manufacturers to India to make parts and export finished phones and is seeking tax concessions on import of key components. However the Indian government has rejected most of the demands of the US company.
According to the Indian law, Apple will need to source 30 percent of components locally, and will need to bring the price of the iPhone down as well. iPhone SE was launched in March, and its India price at that time was Rs. 39,000, while in the US it retailed for $399 (roughly Rs. 25,500). It currently sells in the Indian market around the Rs. 25,000 mark, and this still falls in the premium mid-range segment in the Indian market. The WSJ report states that the government hopes that Apple eventually drops its price by $100 (roughly Rs. 6,800).
These hopes from Apple are far-fetched, as Apple is known to be stingy when it comes to cutting down its profit margins. However, if Apple manufactures in India, the cost of tax duties and other legal formalities will go down significantly, giving Apple the margin to price its iPhones more competitively.
In any case, how Apple deals with government regulations and the competitive Indian smartphone market remains to be seen. According to fresh data from Kantar Wolrdpanel, Apple has a massive iPhones sales growth opportunity in India. Smartphone penetration in India grew by 16 percent year-on-year in the first quarter of 2017; while worldwide growth was just at 3 percent, indicating the potential in the country. Furthermore, the ingrowth of 4G, thanks to Reliance Jio, makes India more lucrative in the eyes of the Cupertino giant.