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Apple's first 'Assembled in India' iPhone hits the market but don't expect a price cut

Apple has been going back and forth with its iPhone production in India but the Cupertino-based company has finally managed to put a few "Indian" iPhones on the shelf for buyers.

BT Online   New Delhi     Last Updated: June 27, 2017  | 16:32 IST
Apple's first 'Assembled in India' iPhone hits the market but don't expect a price cut

Apple has been going back and forth with its iPhone production in India but the Cupertino-based company has finally managed to put a few "Indian" iPhones on the shelf for buyers. However, these devices are still selling at the same prices. There is no evidence if this will be the case when the device is produced at a larger scale.

Apple's iPhone SE is the designated phone which is being produced in India. Considering that the devices assembled here in India are in a limited number, it's most likely not enough to change the overall cost of the device. Currently, the device is selling at a price of Rs 27,000 instead of the speculated price of Rs 20,000 for phones made under the 'Make in India' campaign.

The boxes of these iPhone SEs come with a 'Designed in California. Assembled in India' tag. According to a report by IBT, the first batch of 'Assembled in India' devices was spotted in Bengaluru. 

In a report last month, the company had specifically mentioned the time frame of the launch. "We are beginning initial production of a small number of iPhone SE in Bengaluru.  iPhone SE is the most popular and powerful phone with a four-inch display in the world and we'll begin shipping to domestic customers this month," Apple told IANS in an email.

Will production of Apple phones in India reduce their cost in our market?

In 2016, Apple products were most expensive in India. There are a couple of reasons why this is the case. Firstly, the American company needs to pay heavy custom duty while importing their products and secondly, they have to rely on a heavy network of retailers in India which ultimately reduces their profit margin in the country.

To maintain that margin and keep a buffer between weakening rupee and their desirable profit, the company has prices higher than other countries. The prices are to come down once it starts manufacturing in India.

The launch of GST will also be a determining factor in the new prices. Once the tax reform is executed, the Indian government claims the current taxes on smartphones, averaging around 13.5 per cent, will be brought down to 12 per cent, reducing the overall price of smartphones.

Indian authorities have offered Apple tax concessions with the requirement that at least 30 per cent of the components used in building these iPhones should be locally sourced.

The company is looking to India after sales in the greater China region, once a major factor in Apple's rise, fell 14 percent year over year to $10.7 billion in the most recent quarter.

No matter how big a company, ignoring the Indian market can be a detrimental move for any international smartphone brand and Apple does not want to be left behind in the second largest Smartphone market. The company will definitely face the onslaught of Chinese smart phones as competition but the revised prices might give its sales the required boost.

 

 

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