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APPLE STARTS MANUFACTURING IPHONE 14 IN INDIA: WILL THIS MAKE IT CHEAPER?

Apple lovers in India are all charged up. The “Made in India” iPhone 14 is coming soon.

The tech giant has confirmed that the newly launched iPhone 14 will be assembled in the country. It told the news agency Reuters that it is “excited to be manufacturing iPhone 14 in India”.

Where is the iPhone being made?

The new iPhone 14 is manufactured at Foxconn’s Sriperumbudur facility near Chennai. The company is the world’s largest contract electronics manufacturer and an iPhone assembler, PTI reported.

“The new iPhone 14 lineup introduces groundbreaking new technologies and important safety capabilities,” an Apple spokesperson told the news agency.

The latest iPhone was launched by Apple’s chief executive officer Tim Cook during the company’s annual “Far Out” event on 7 September. The new lineup includes iPhone 14, iPhone 14 Plus, iPhone 14 Pro, and iPhone 14 Pro Max, which has an improved camera, robust sensors, and satellite connectivity features to send SOS texts in emergencies.

 

“The new iPhone 14 lineup introduces groundbreaking new technologies and important safety capabilities. We’re excited to be manufacturing iPhone 14 in India,” Apple said.

What does it mean for India?

The prices of the iPhone 14 are among the highest in India compared to the rest of the world because of taxes and duties. In India, Apple’s latest lineup prices start at Rs 79,900.

The price of the pro model has been hiked by Rs 10,000. The Apple iPhone 14 Pro could cost Rs 1.30 lakh, and iPhone 14 Pro Max will go up to Rs 1.40 Lakh, making them the most expensive iPhones to be launched in the country.

iPhone 14 series prices will also include 18 percent GST and 22 percent customs duties (levied before GST).

By manufacturing the iPhone 14 in India, Apple will be able to save 20 percent on import duty. While this may impact the model’s price later, there may not be any immediate changes in the pricing, according to a report in India Today.

The new iPhones will only be assembled in the country; hardly any of its components are locally sourced. Hence, the cost of production is expected to remain the same.

Is this the first iPhone to be made in India?

No. The iPhone 14 is the sixth iPhone to be made in India.

Apple started making iPhones in India with the iPhone SE in May 2017 at its contract manufacturer, Wistron, in Bengaluru. In 2019, it promoted the iPhone 6s as part of the “Made in India” campaign after its India shipment decreased from 3.2 million units in 2017 to 1.7 million units by the end of 2018. iPhone 11, 12, and 13 were also assembled in India.

The company works with three partners to assemble iPhone models in the country – Wistron, Foxconn, and Pegatron.

Apart from “Made-In-India” labels on the boxes of iPhones sold in India, there has been no change in pricing for iPhone 13, iPhone 12, or the other older models. Only during the festive sales do iPhones become cheaper because of limited-duration bank offers and cash backs. Local manufacturing doesn’t reduce the MRP, reports News18.

Apple does not make its top-end iPhones like India’s Pro or Pro Max series. Also, the phones made here are for domestic sales within the country.

If the phones are made in India, why are they not cheaper?

Most iPhone components are made in China, and Apple has to pay import duty.

Assembling the phone in India is unlikely to bring down prices as Apple’s OEMs (original equipment manufacturers) pay high import duties on components. Besides import duty, there is 18 percent GST, other fees, and Apple’s profit margin. Hence, the costs remain high, reports Outlook.

Apple also relies on third-party retail networks to sell its smartphones and other products in India, which adds to the cost.

According to a Bloomberg report, the first batch of Indian-made iPhone 14 models will be finished by October or early November. This will be the first time that a new generation iPhone production will begin in another country simultaneously with China.

Why does Apple want to make phones outside China?

Stringent COVID-19 restrictions in China hit the production of Apple phones and their exports. To cover the losses, Apple asked its other contract manufacturers in Vietnam and India to ramp up production to meet the demands.

The ongoing geopolitical tensions between Washington and Beijing have pushed the California-based company to not depend so much on the Asian giant.

Analysts at JP Morgan expect Apple to move about five percent of iPhone 14 production from late 2022 to India, the world’s second-biggest smartphone market after China, reports Reuters. Apple could make one out of four iPhones in India by 2025, JPM analysts said in a note last week.

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