Apple Inc will in the coming months start assembling its lower-priced iPhone SE models at a contract manufacturer's plant in the southern Indian technology hub of Bengaluru, an industry source with direct knowledge of the matter said on Friday.

Apple's Taiwanese manufacturing partner Wistron Corp is setting up a plant in Bengaluru to focus solely on assembling iPhones, a separate source told Reuters earlier this month.

Apple's move comes as it seeks to boost its share in the world's fastest growing major mobile market, where handsets far cheaper than Apple's iPhones dominate. It also comes as smartphone sales growth is slowing in Asia's other massive market, China.

To lower prices, Apple has been seeking to set up local production and has been in talks with the Indian federal government regarding issues such as tax concessions.