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India to be world's 3rd assembler of iPhones

TushShar

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BENGALURU: With the upcoming
Bengaluru assembly plant of Apple,
India will become only the third
country to do the final assembly of
iPhones -an indication of how
important the country has become
for the world's most-valued
company.
Apart from one assembly facility in
Brazil, all of Apple's assembly units
for its bestselling product are in
China.
Apple uses a global and fairly
complex supply chain.The parts for
the iPhone, iPad, iPod and Mac are
manufactured, mostly by third
parties, across 28 countries. It has
766 suppliers, of which 346 are
based in China, 126 in Japan, and 69
in the US. There is one in India -in
Sriperumbudur in Tamil Nadu. That's
a unit of Flextronics. But it's not
clear what the unit makes.
Some parts made by these suppliers
are sub-assembled in certain
locations. All the sub-assembled
units and other parts are brought
together for final assembly in either
China or Brazil in the case of
iPhones. For the Apple Mac, the final
assembly happens in China, US, and
Ireland -the last of these is Apple's
own facility -and for the iPod, China
is the only final assembly location.
With India becoming one of the
world's biggest smart of the world's
biggest smartphone markets and
one of iPhone's fastest growing
markets, Apple has decided to
assemble the iPhone here.As TOI
reported last week, Taiwan's
Wistron, one of Apple's suppliers
and assemblers, will set up a facility
in Bengaluru's industrial hub of
Peenya for the purpose.The
products from this facility are
expected to be available in the
domestic market towards the end of
next year.
Wistron has three supply facilities
for Apple and an iPhone final
assembly unit in China.
"An assembly unit does not require
big investments," said Jaipal Singh,
market analyst at research firm IDC.
He said this has been a strategy that
all Chinese handset manufacturers
have followed in India over the past
couple of years. "Labour in India is
cheaper than in China. It makes
sense to grow the Indian market by
establishing a domestic plant," he
said. Analysts said the unit would
also manufacture for exports over
time.
Data from Hong Kongbased
Counterpoint Technology Market
Research showed Apple sold 2.5
million iPhones in India from
October 2015 to September 2016, a
rise of more than 50% over the year-
ago period. Apple India clocked
robust sales touching Rs 9,997 crore
in the 2016 financial year, up 56%
from Rs 6,472 crore in the year
before. iPhones are expensive, but
with a local assembly unit, some
analysts believe, Apple can avoid
import tariffs and cut the iPhone
price by around 15%, allowing it to
expand the market.
Apple CEO Tim Cook recently said
India's low percapita income would
not become an impediment in
growing Apple's market share in the
country . More than 50% of Apple's
sales in India are contributed by
older models which become
cheaper once newer models are
launched, indicating the brand's
aspirational value.Apple has around
40-45% market share in India's
premium phone segment.

India to be world's 3rd assembler of iPhones - Times of India
 
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