Foxconn is reportedly looking towards India as a possible base for assembling the high-end iPhone models, a report claimed Tuesday, citing people familiar with the development. The latest report comes less than a month after two separate reports had claimed the same, indicating that the Taiwanese contract manufacturer is indeed serious about expanding its Indian facilities. The company currently assembles smartphones for firms like Xiaomi in the country. With a trade war between China and United States not close to a proper resolution, more companies with manufacturing facilities in China and customers in the United States are looking to diversify their supply chains.
According to a report in The Wall Street Journal citing people familiar with the matter, Foxconn is mulling producing "higher-end, pricier" iPhone models in India, including models with OLED displays. The contract manufacturer is currently studying whether to include possible India expansion in its budget plans, noted the report citing an unnamed person familiar with Foxconn's plans. The company is also said to be considering Vietnam as it looks to diversify its manufacturing bases, but India has a better chance of seeing a Foxconn factory churning out new iPhone models thanks to its larger growth potential, the report added. A bigger local presence should also allow Apple to better target the market.
If Foxconn goes ahead with its plans to assemble high-end iPhone models in India, it is likely to help Apple in keeping the prices of its smartphones down in the country. Right now, the Indian government charges as much as 20 percent tariff on any phones imported from outside. After the increased tariffs over the last couple of years, several smartphone manufacturers have set up bases in the country to assemble phones. Expanded business in India will certainly help the Cupertino-based company in shedding the reliance over China for growth as the smartphone market has stagnated in most of the western countries.
Another Taiwanese contract manufacturer Wistron was recently reported to be considering expanding its India operations. In a filing on Taiwan Stock Exchange (TWSE), the company has noted that it has increased the authorised capital of its Indian subsidiary to Rs. 3,000 crores for the same. Apple has been assembling a couple of its low-end iPhone models in India for some time now. Wistron has plant in Peenya industrial area of Bengaluru city, where the contract manufacturer assembles the iPhone SE and iPhone 6S units for the country.
Late last month, a report from Indian daily The Hindu had claimed that a Foxconn unit in Sriperumbudur, a town panchayat in Chennai Metropolitan Area, will start manufacturing iPhone models from 2019. The daily had cited a meeting chaired by Chief Minister Edappadi K. Palaniswami over the matter. Apparently, Foxconn has already created a separate manufacturing unit in its existing Sriperumbudur factory.
A report from news agency Reuters reiterated The Hindu report, citing its own source. It added that Foxconn will invest Rs. 25 billion ($356 million) to expand the Sriperumbudur plant.