Largest electronics manufacturer, Foxconn, looking to move iPhone production to India to reduce costs and compete in third-largest smartphone market

This article is more than 5 years old

This article is more than 5 years old

iPhones could soon be made in India as well as China, according to Indian government officials.

Apple’s manufacturing partner Foxconn, which makes the iPhone, iPad and several other Apple products in factories in China, is in talks to open factories in India to make iPhones.

The move would help Foxconn mitigate accelerating labour costs in China, potentially lower prices for iPhones sold in India and move the site of construction closer to buyers in the world’s third-largest smartphone market.

“Foxconn is sending a delegation of their officers to scout for locations in a month’s time,” said Subhash Desai, industries minister of India’s western state Maharashtra.

Factories and data centres

Lower production costs could also help Foxconn keep hold of Apple orders amid intensifying competition with nimble manufacturing rivals such as Quanta Computer Inc.

Foxconn, the world’s largest contract manufacturer of consumer electronics, has said it is aiming to develop 10-12 facilities in India, including factories and data centres, by 2020, but had given no detail.

The Taiwan-based company declined to comment on detailed plans on Thursday, citing commercial sensitivity. Apple did not respond to comment. Desai said Foxconn had yet to make any firm commitment at this stage.

Tough competition

India has the second-highest number of mobile phone accounts behind China. According to networking company Cisco Systems, there will be 650m smartphones in the country by 2019. The number of tablets will rise 9% to 18.7m by then.

Apple holds 10% of the smartphone market in India, according to data from Counterpoint, and faces tough competition from arch-rival Samsung and local brands such as Micromax, which produce similarly specified smartphones for around half the cost than an iPhone 6, or less.

Foxconn is no stranger to India. It ran operations in India until last year producing Nokia devices. Its return to the country would be a boon for India’s manufacturing industry, which prime minister Narendra Modi has made a target for a reboot to rival China.

A lack of good infrastructure and suppliers are the biggest hurdles to making technology products in the country, forcing most of India’s more than 100 different phone companies to get their products from the mature markets of China and Taiwan.

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