Foxconn Technology Group chairman, Terry Gou has said that iPhones will go in mass production in India this year. This will mark the shift of Apple‘s largest contract manufacturer from China to India.
Gou said that Prime Minister Narendra Modi has invited him to India, as his Taiwanese company prepares for its expansion in the country. Earlier, Apple has produced low-budget iPhones in India through its plant in Bangalore and now the company will be producing high-end iPhones in the country as well. According to a Bloomberg report, Foxconn is ready to start trial production of the latest iPhones in the country then follow it with full-scale assembly at its factory outside the southern city of Chennai.
“In the future, we will play a very important role in India’s smartphone industry,” Gou said at an event in Taiwan. “We have moved our production lines there.”
India is growing rapidly as a smartphone market, acquiring the fourth position in terms of the fastest growing smartphone market. China, on the other hand, has been trapped in one place, while Apple is losing share to local competitors such as Huawei and Xiaomi. Apple has not been a major player in India as well, chiefly because of its sky-rocketing price, nevertheless, local manufacturing of iPhones would help Apple avoid import duties of 20 percent.
“For Foxconn, the China market for iPhones is saturated, and labor costs are three times higher compared with India,” said Karn Chauhan, a Gurgaon-based analyst at Counterpoint Research. “India is still an emerging smartphone market, it has a lot of potentials domestically and could serve as an export hub for the region.”
Gou also said on Monday that he will be retrieving from daily operations in order to focus on broader strategy. The founded would not be stepping down or relinquishing his chairmanship, said Louis Woo, special assistant to Gou.
China has been Apple’s biggest manufacturing base for years, home to Foxconn’s biggest facilities and hundreds of other partners. Given that, it is unclear how Apple’s venture into India will affect the company’s China operations.
Foxconn already has two manufacturing bases in India: Andhra Pradesh and Tamil Nadu, where it produces devices for Xiaomi and Nokia. Establishing more production in India will help Apple move away from China’s ongoing trade tensions with the US.
The Indian assembly line of Foxconn’s Hon Hai Precision Industry Co. would cater to local and export markets until Apple releases its next iPhones in September, people familiar with the matter have said. Foxconn will initially be investing $300 million to set up for Apple, with investment to rise up as capacity expands, they said.
Gou said that his company is talking to the government about investment terms. He has a few software people in India and he plans to increase the headcount to 600, he said.
“We are the primary assembler after all,” Gou said on Monday. “If our customer wants to boost its scale, it will need to depend on us to grow the comprehensive supply chain.”
This initiative is set to create more than 25000 jobs in India.
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