Foxconn gearing up to make new iPhones in India

Foxconn Technology Group is within weeks of starting trial production of the latest iPhones in India, as Apple Inc seeks to revive its fortunes in the country, people familiar with the matter said.

The trial run of the iPhone X range of devices will come before Foxconn starts full-scale assembly at its factory outside Chennai, the people said.

Wistron Corp already produces older models, such as the iPhone 6s, iPhone SE and iPhone 7, at a plant in Bangalore.

Apple has become a minor player the country, as its higher prices deter customers. Production in India would help the company avoid import duties of 20 per cent and also meet the 30 per cent local sourcing rule.

This will allow it to open its own stores in the country.

“Seen from Cupertino, the Indian market looks minuscule, so Apple’s strategy has been myopic,” said Neil Shah, research director at Counterpoint Research.

“They haven’t capitalised on the ground potential — India will cross half-billion smartphone users this year,” he added.

In the first two months of 2019, Apple shipped about 1,50,000 devices in India and is likely to see a 50 per cent drop in the March quarter from the year earlier, according to Shah.

Foxconn has two assembly sites in Andhra Pradesh and Tamil Nadu, where it makes devices for Xiaomi and Nokia. Locating more production in India would also help diversify Apple and Foxconn’s manufacturing footprint away from China, amid ongoing trade tensions with the US.