Apple to start assembling iPhone SE in the Bengaluru plant: Here's why it makes sense

Apple has signed a contract with manufacturer Wistron to set the factory and assemble the smartphones. According to senior officials in the company, Apple will not wait for the demands of tax concessions to be accepted.


Apple will soon start to assemble iPhone SE in the Bengaluru plant to start its manufacturing in India. The company has signed a contract with manufacturer Wistron to set the factory and assemble the smartphones. According to senior officials in the company, Apple will not wait for the demands of tax concessions to be accepted as they pertain to a larger picture and future plans of the company in India. According to a report by The Economic Times, Apple wants to 'experience manufacturing in India".

The affordable iPhone

One thing to note is that the plant is all set to start assembling the smartphones by April 2017 and the tax demands are not connected to the plant being set up by Wistron. Both Apple and Wistron have not released any official statement regarding this information or any other information.

The reason the company is assembling iPhone SE is because it wants to compete with other players in the market in a country where 70-80 percent of the smartphones sold are under Rs 10,000. Currently, the basic model of iPhone SE smartphone is priced at Rs 39,000 and still retails around the Rs 30,000 mark.

The main reason why iPhone SE was introduced was to offer a cheaper alternative to the people who can't afford Apple's flagship lineup but still want to get an iPhone. It also addresses the market which still prefers the smaller 4-inch display size. By assembling iPhone SE, the most economical product by Apple in its iPhone series, the company can price the smartphone at a lower price point to lure more customers. As has been reported in the past, when a smartphone maker makes phones in India, there is an immediate 10-12 percent savings, as the import duty is cut.

Apple has miles to go in terms of iPhone volumes sold in India

Apple may be the most popular smartphone maker in the world, and quite a popular brand in India. It has earned record revenue in India last year, despite demonetisation. But in terms of sales, there were only 2.5mn iPhones sold last year, as compared to over 70mn phones sold by Samsung. Yes, it is unfair to compare the two as Samsung has a much wider portfolio across form factors and price points. But if Apple really wants to make waves in numbers of smartphones sold, it has to address the popular price segments. The iPhone SE could be a good phone to start that off.

According to the latest IDC numbers, the Indian market has been dominated by Chinese smartphone players. There isn't a single Indian player in the top 5. Apple, in comparison has sold less volumes. The iPhone SE then is an important phone for Apple from the Indian smartphone buyer perspective. It makes the entry barrier for entering into the Apple ecosystem, relatively economical.

The report further points out that even though iPhone 5S is the most selling smartphone in India, the company has decided to sell iPhone SE because SE is the most recent smartphone that will get future iOS updates while 5S is set to be discontinued in near future.

There are unverified rumours that the company is shifting some of its manufacturing plants to India because of the rise in labour costs in China. We have detailed all the things that the company has demanded from Government of India and they seem to be part of the second phase of Apple's plan in India.


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