Indian Govt. in talks with Foxconn Technology.
By Dileep Thekkethil
BENGALURU: The Indian government are in talks with Foxconn Technology, the makers of Apple’s iPhone, to build an exclusive Apple plant in India, which could end up lowering the price of the premium smartphone, which is currently trailing behind arch rivals Samsung and other domestic manufacturers.
Foxconn’s decision to make an iPhone Plant in India is the result of the growing wage inflation in China, where the company is currently making a majority of iPhones, according to media reports. Foxconn’s migration to India could see Apple making a bigger cut in the second most active smartphone markets in the world.
By lowering the production cost of iPhones, Foxconn could attend to the increasing demand of Apple and put up a tough competition with their manufacturing rivals Quanta Computers Inc. who also manufacture Apple products.
Subhash Desai, the industries minister of Maharashtra was quoted by Reuters, saying, “Foxconn is sending a delegation of their officers to scout for locations in a month’s time.”
If everything goes as planned, Foxconn could end up building 10-12 manufacturing units in different parts of India, and this includes factories and data centres. The company plans to complete the whole migration process by the end of 2020.
Foxconn is a Taiwanese tech giant, making electronic products for different companies on a contract basis. When contacted, the company refused to comment about the impending deal, but according to Desai, Foxconn is planning to manufacture iPhones, iPads and iPods for both domestic and global market once they start operations in India.
Apple representatives also declined to make a comment about the deal. Currently, 16 GB version of Apple iPhone 6 is sold in India for Rs. 44,000 ($687) whereas Samsung Galaxy S6 is priced at Rs. 40,000 ($625). When Foxconn starts operations in India, the price of iPhone is expected to come down dramatically.
Foxconn was earlier forced to shut down its operations in India after its client Nokia closed shop. The return of Foxconn to India is seen as a major victory of the “Make in India” campaign. A major hurdle for prime minister Narendra Modi’s vision is the credibility gained by China which houses a majority of assembly units and factories. Another factor that adds to it is the lack of infrastructure and suppliers, forcing even indigenous companies to sell products manufactured in warehouses located in China and Taiwan.
Foxconn has many smartphone top brands under its wing, but Apple being the biggest is a top priority for the company. Popular brands such as Xiaomi, Acer and Sony also use components manufactured by Foxconn.
Sky Li, Vice president of Chinese smartphone manufacturer Oppo was quoted by Reuters saying, “The smartphone boom in India indicates the time is just right to focus on expansion plans and increasing volume in India to a comparable level with the China market in next five years.”