Apple has been moving their factories out of the United States. There is no surprise that they will soon tap India’s manpower to build their devices.
The IT minister of Karnataka, a southern state of India, gives the green light for Apple to outsource their manufacturing in the subcontinent. Indian officials are taking advantage of their booming middle class economy while sales in China is slow. The factories will be built in India’s technology hub, Bangalore.
Tim Cook, Apple’s current CEO, has already released a statement that they will invest in India – the country the population of more that 1.25 billion people. Manufacturing is expected to start by April according to Priyank Kharge, the state minister of Karnataka’s information technology and biotechnology.
The iPhones that will be assembled in India are targeting for the domestic market. However, Apple will still struggle with its rival, Samsung, which have 23% of the market share in India. Officials in Karnataka believes that Apple’s entry to India’s phone manufacturing industry will change the game.
The difficulty for foreign companies to source in India lies in the laws that foreign retailers must source 30% of their products within the country. Once Apple will start operating, iPhones will be more available in the domestic market.
Lowering prices of iPhones and other Apple products will be another effect of the outsourcing. The 1% share figure will soon boost. India has high population but only a few owns a smartphone which makes the Asian country to be a lucrative market.
When Tim Cook visited India last year, he was photographed using Prime Minister Narendra Modi’s gold iPhone.