The Information Technology minister of Karnataka, Priyank Kharge, has revealed that Apple Inc. (NASDAQ:AAPL) will begin manufacturing iPhones in India in April. Production of the iconic smartphone will be done at a plant run by Wistron Corp, a contract manufacturer from Taiwan.
“In less than a month … Apple will start assembling and making its high-end iPhones at its plant in the city,” Kharge said.
Indian challenge
Though the development is a big win for Apple which is seeking growth in emerging economies such as India which has a vast untapped market, Apple will have to be more innovative with regards to pricing if it is to conquer the market in the world’s second-most populous country. This is because Apple’s smartphones are too expensive for the Indian consumer and currently only the upmarket consumer can afford them. On that count, Apple is beaten hands down by the likes of Samsung which has smartphones that appeal to just about anyone from the entry-level to the high-end segment.
To succeed in India, one of the assumptions apple needs to avoid making is assuming that it can employ the same strategy it did in China since the two are completely different markets. For one, the per capita income in China is currently around $8,000 while that of India is at present $1,500. And while China has now industrialized and theh majority of its population no longer rely on agriculture, the situation is different in India as a significant percentage of the population depends on rain-dependent and unproductive farming on small plots of land for their livelihoods.
600 million potential customers
This means that if Apple is to grab a decent share of the Indian market where about 600 million are yet to buy a smartphone, it will have to reduce its prices further than the $450 that older versions of the iPhone are going for. Additionally, Apple will have to drop its ‘Americanness’ and integrate itself with the Indian market so that all its products can appeal to Indians.
On Thursday shares of Apple Inc fell by 0.13% to close the day at $143.93.
