Apple is reportedly planning to start trial assembly of iPhones in India next month. According to state officials quoted by Economic Times, the Cupertino-based iPhone-maker will start assembling iPhones regardless of the outcome for requested tax concessions.
Apple has been seeking financial concessions and 15-year tax exemptions on imports of components and other equipments from the Indian government. The company has also asked the government to wave off the local sourcing norms for setting up its retail stores here. Karnataka state government is also said to be pursuing Apple's request for concessions with the Centre.
"We are working to see that (Apple) brings its entire component making ecosystem to Bengaluru and begins to export from here. We are not much concerned about Apple making iPhones for the domestic market, which will happen anyway," one of the officials told ET.
Apple has tied up with Taiwan-based ODM Wistron to assemble iPhones at latter's assembling unit in Bengaluru. Wistron will start assembling iPhone SE first before expanding to other iPhone models. Apple's local assembling with Wistron will likely be a pilot phase before it joins hands with Foxconn for large-scale manufacturing.
For Apple, iPhone contributes the most in terms of revenues and iPhone sales have been declining globally in the past few quarters. Apple reported record profits in Q1 on the back of strong demand for new iPhones but it expects the sales to drop in the next quarter. Apple has been facing stiff competition from local brands in China and its revenues declined 12 percent in the quarter ending December.
With growth stabilising in the most major markets, Apple has identified India as its next big opportunity. The company has been lobbying for additional concessions apart form what the country's foreign investment policy allows. Now it seems Apple will continue to seek exemptions but not stall its proposed local assembly plans.