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Apple supplier is said to plan India expansion in iPhone push

Apple’s devices are particularly expensive in India because the government levies tariffs on devices manufactured outside the country.

Updated: Nov 07, 2017, 01.46 PM IST
By Saritha Rai

Apple Inc.’s primary iPhone assembler in India is scouting for about 100 acres of land in Bangalore to expand its facilities for the world’s most valuable company, according to people familiar with the matter said.

Wistron Corp. executives toured the city last week and have shortlisted a few parcels including one plot close to the airport, said the people, asking not to be named because the matter is private. The Taiwanese manufacturer, which began making the iPhone SE in India this year, may use the facilities to supply other brands too, they said. Wistron did not immediately respond to requests for comment.

Apple has been a minor player in India, the world’s fastest growing smartphone market, largely because its phones are more expensive than those of rivals such as Samsung Electronics Co. and Xiaomi Corp. Apple Chief Executive Officer Tim Cook made his first trip to the country last year, meeting Prime Minister Narendra Modi and expressing hopes for an expanded presence.

On Apple’s earnings call last week, Cook said the company has “ great momentum in India, where revenue doubled year over year.” He said he’s confident the company can gain ground, but it will take work on many fronts.

“It’s building stores. It’s building channels. It’s building markets. It’s building the developer ecosystem,” he said. “It’s having the right product lineup for the market. And I feel like we’re making good progress there and are gaining understanding of the market, but we still have a long way to go.”

Apple’s devices are particularly expensive in India because the government levies tariffs on devices manufactured outside the country. That comes on top of prices that start at $999 for the new iPhone X. Its manufacturing in India has been limited to small volumes of the SE, a lower-end smartphone.

Apple has been locked in negotiations with the federal government for about a year over expanding manufacturing facilities and opening its own retail stores. The two sides have been meeting regularly to consider the Cupertino-based phonemaker’s demands, which include exemption from duties on capital equipment, removal of customs duty barriers and the ability to import used iPhones to refurbish and export.

As recently as last month, the government’s Department of Industrial Policy & Promotion wrote to the company saying it was "actively involved in resolving issues raised by Apple" and the various key departments in charge of vetting these concessions are ’‘positively inclined to the proposal," according to a document from a DIPP official to Apple that was reviewed by Bloomberg News.

Hon Hai Precision Industry Co., the primary Apple assembler globally, has been talking to local governments in India about setting up plants there. It does not currently make iPhones for Apple in India.
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