MUMBAI/DELHI (Reuters) – Apple Inc will begin with the assembly of the top-end iPhones in India through the local unit of Foxconn as early as 2019, the first time that the Taiwanese contract manufacturer have the product in the country, according to a source familiar with the matter.
A motorcyclist rides past the logo of Foxconn, the trading name of Hon Hai Precision Industry, Taipei, Taiwan, March 30, 2018. REUTERS/Tyrone Siu
Even more important, Foxconn will assemble the most expensive models, such as the devices in the flagship of the iPhone X family, the source said, that has the potential of taking Apple’s business in India to a new level.
The work will take place in the Foxconn plant in Sriperumbudur town in the southern state of Tamil Nadu, this source added.
Foxconn, which already makes phones for Xiaomi Corp, will invest 25 billion Indian rupees ($356 million) for the expansion of the plant, including investments in the iPhone-production, Tamil Nadu Industries Minister M C Sampath told Reuters.
The investment could create as many as 25,000 jobs, he added.
The other source declined to the name of this person is not allowed to speak to the media. A third source confirmed Foxconn planned to assemble iPhones in India.
The Hindu newspaper first reported on 24 December that the Foxconn factory would start production of the various models of the iPhone. Reuters is the first report of the size of the investment and the nature of the phones to be assembled.
Until now, the Cupertino, California-based Apple has only the assembly of the lower cost of the SE and 6S models in India by Wistron Corp’s local unit in Bengaluru technology hub.
Its sales in India are also aimed at lower-end phones – more than half of the revenue is driven by models which are older than the iPhone 8, launched last year, according to technology-research firm Counterpoint.
Apple launched the expensive iPhone X last year, but has cut production of the phone, according to analysts, since it started with the sale of the newer versions, iPhone XS and XR, worldwide this year.
Nevertheless, it would be able to get Foxconn to the older iPhone-X-version in India, where it sells cheaper models in an attempt to get a larger share of the world’s fastest growing market for mobile phones.
Full details of Apple’s deal with Foxconn are not yet clear and could change.
It is not known whether the iPhone meeting will be moved from existing Foxconn factories in China and elsewhere. It is also unclear whether the production will be limited to the meeting or a part of the production in India.
Apple spokeswoman Trudy Muller declined to comment for this story.
The Apple logo is seen outside the flagship store in downtown Milan, Italy, October 23, 2018. REUTERS/Stefano Rellandini
Foxconn said that it does not react on matters relating to existing or potential customers, or one of their products. It does not immediately respond to a request seeking confirmation that it will invest $356 million in Tamil Nadu.
Apple shocked investors last month with a lower-than-expected sales forecast for the Christmas quarter that shook parts suppliers in the world.
Foxconn has previously expressed concern about the demand for the Apple’s flagship devices.
Reporting by Sankalp Phartiyal and Sudarshan Varadhan; additional reporting by Stephen Nellis in San Francisco; Editing by Martin Howell