Wednesday, Nov 30, 2022

Apple To Make iPhone 14 In India, Here's Why It’s Unlikely To Be Cheaper

Foxconn’s Tamil Nadu factory, which produces iPhone 11 and 12, is likely to make iPhone 14, too

The stage is set for the launch of the iPhone 14 on September 7 as Apple has rolled out invites for its annual event. However, what’s interesting this time is that the tech giant is reportedly planning to start manufacturing iPhone 14 in India. The move by Apple comes as it looks to shift manufacturing iPhone out of China due to the ongoing geopolitical tensions between the US and Beijing amid lockdowns across China that have disrupted its production.

A Bloomberg report says the first batch of Indian-made iPhone 14 models will be finished by the end of October or early November. This will be the first time that production of a new generation iPhone will begin in another country simultaneously with China.

Foxconn’s Tamil Nadu factory, which produces iPhone 11 and 12, is likely to make iPhone 14, too, according to analyst Ming-Chi Kuo of TF International Securities Group.

Why Does Apple Want To Make iPhones Outside China?

Earlier this year, Apple set a target of manufacturing iPhones worth Rs 47,000 crore in India in FY23. Apple has been working with suppliers to ramp up manufacturing in India and the first iPhone 14s from the country are likely to be finished in late October or November, following the initial September release, Bloomberg reported.

Usually, a new iPhone production outside of China usually takes a few months to start. Foxconn started assembling iPhone 13 in India, months after it was launched in all markets. Apple’s flagship iPhone 13 was released in September 2021, but the Cupertino-based firm began its trial production in India three months after the launch.

In the past, new iPhone models only got assembled in India 7-8 months after hitting the market.

Manufacturing iPhones in India will help the company to cut down the cost price and it can save tax on importing units from different countries. But that doesn’t mean that the company is going to sell the smartphone at a cheaper price, the selling price will remain the same.

But it seems the iPhone production in countries apart from China is aimed at serving local markets as it may not be enough to meet global demands.

Due to this, Apple has been shifting iPhone production from China and expanding to other markets including India.

Is This The First Time Apple Is Making iPhones In India?
Apple started assembling iPhones in India with its budget iPhone SE in 2017. 

It manufactures iPhone 11 and iPhone 12 at the Foxconn-owned Chennai facility while the iPhone SE and iPhone 12 are manufactured at the Wistron facility in Karnataka. On April 11 this year, Apple started making the iPhone 13 in India – the fourth model to be produced locally.

Will India-Made iPhone 14 Be Cheaper?

Although another iPhone will be assembled in the country, it, however, may not bring down the cost of locally-made iPhones.

Apple would still rely on production from China as most iPhone components are manufactured in the country.

Despite being manufactured in India, the iPhone 13 was priced at Rs 79,900, the same as it was at launch. The prices came down only after a few months when Apple started assembling the phone in India. Likewise, the locally made iPhone 14’s price may also not go down. 

The prices of iPhones are high in India as Apple imports these devices from China after paying import duty.

A completely built unit of a mobile phone attracts nearly 20 per cent customs duty.

Assembling iPhone 14 in India is unlikely to bring down its prices as Apple's OEMs (original equipment manufacturers) pay high rates of import duties on components. Besides import duty, there is 18 per cent GST and other fees, and Apple's own profit margin. Thus, the cost of locally made iPhones is still high.

Besides, Apple relies on third-party retail networks to sell its smartphones and other products in India which also increases the price of iPhones.