Apple will start assembling its top-end iPhones in India through the local unit of Foxconn as early as 2019, Reuters reported.
The Taiwan-based contract manufacturer will be assembling iPhone models such as iPhone X at Foxconn’s plant in Sriperumbudur at Tamil Nadu.
Foxconn, which already makes phones for Xiaomi in India, will invest INR 25 billion or $356 million to expand the smartphone manufacturing plant, including investment in iPhone production, said Tamil Nadu’s Industries Minister M C Sampath. The investment may create as many as 25,000 jobs.
Foxconn has plans to assemble iPhones in India, in a move that could help both it and Apple to limit the impact of a trade war between the United States and China.
The Hindu newspaper reported on Dec. 24 that the Foxconn plant would begin manufacturing various models of the iPhone.
Cupertino, California-based Apple has only assembled the lower-cost iPhone SE and iPhone 6S models in India through Wistron Corp’s local unit in the Bengaluru technology hub.
Apple launched the pricey iPhone X last year but has cut production of that phone, since it began selling the newer versions, iPhone XS and XR, globally this year.
Foxconn, the world’s biggest electronics contract manufacturer, is considering setting up a factory in Vietnam. It will be one of the biggest recent steps by a major company to secure an additional production base outside of China.
Foxconn has previously admitted the China-U.S. trade war was its biggest challenge and that its senior executives were making plans to counter the impact.
“Widening iPhone manufacturing in India through Foxconn will allow Apple to hedge the risk of any new U.S. trade policies,” said Navkendar Singh, an associate research director at IDC India.
Indian taxes on import of devices and components have increased the pressure on Apple. Apple has 1 percent market share in terms of smartphone shipments. Xiaomi is the market leader ahead of Samsung.
Making more phones locally will help Apple save costly duties. Apple announced last month a lower-than-expected sales forecast for the Christmas quarter. Foxconn, the main supplier of iPhones, has expressed concern over demand for Apple’s flagship devices.