We knew that Apple has started manufacturing iPhones at Bengaluru, but what we certainly didn’t know what that Apple has already started shipping them! iPhones made in India are already moving to all parts of the country, to start selling later this month!
The Economic Times reports —
“People aware of the manufacturing plans told ET that about 25,000-50,000 units of iPhone SE are being assembled and shipped by Taiwanese contract manufacturer Wistron Corp, on a monthly basis, and the devices will be sold across offline and online retail stores.”
Rumour or Truth?
This time, fortunately, the news is 100% true. In fact, it has been confirmed by Apple. In an official statement, an Apple spokesperson said:
“We are beginning initial production of a small number of iPhone SE in Bengaluru. We will begin shipping to domestic customers this month.”
Apple did not verify the price. It also withheld any information about the exact date of sales, or at what scale they are currently manufacturing iPhones in India.
Aruna Sundararajan, the IT and Telecom secretary called the development “game-changer” as far as India’s (and Apple’s) manufacturing capabilities are concerned.
“This is one of the biggest moves for ‘Make in India’ because when an iconic company like Apple comes in, it means they bring a huge ecosystem with them,” Sundararajan was quoted as saying by the ET.
Of course, not wanting to let the Centre steal all the limelight, Karnataka’s Minister for Industries and Infrastructure, RV Deshpande, was quick to chime in with his, and his State’s contribution to the development:
“We [the Karnataka government] have given them (Apple) full cooperation and support. Apple was looking at the right place, and it’s a proud moment for India, as we’re eager to get more investments from them and others.”
How will the prices change?
This is where the speculation begins. There are basically two theories:
- Jon Snow is Azor Ahai — ‘the Prince that was Promised’.
Oh wait … sorry … wrong theory!!
Let’s get back to Apple and iPhones. So, as to the price of the iPhones made in India, there are two theories:
- Apple will sell them at highly discounted prices to ensure that they grab as much of the mid-range market at possible.
- Apple will continue to sell them at regular prices (with little or no discount), and use the extra profit to increase its marketing and production budget.
This is the current price range for iPhones in India:
As can be seen, the base model for iPhone SE is pegged at Rs 27K.
According to the first theory, the prices could be reduced to as low as 15-16 K.
According to the second theory, the prices would continue to hover around the 25 K mark. As reported by ET —
“Trade partners say that the prices of the locally made phones would initially remain at the current retail prices – around Rs25,000, with the company investing the higher margins made from these devices for a more aggressive sales and marketing play.”
By and large, though, both schools of thought agree that this initial iPhone SE sale will only serve as a trial run. Perhaps Apple will test out both pricing models, if not simultaneously, then consecutively.
Why the Experimentation?
The Indian market is very different from the US market, where Apple has all its market price points and sales strategies figured out. With India, Apple is breaking new ground, venturing into uncharted waters. It will need to do a lot of trial and error before it figures out what works and what doesn’t.
More importantly, Apple needs to figure out how it positions itself.
So far, Apple’s biggest selling point is the aspirational value it offers. Something that comes with its large price tag, making it exclusive only to certain sections of the society. But that same price tag cuts it off of a large chunk of the market it’s trying to capture.
So the dilemma for Apple is: Should it position itself as a pricey product and sell less? OR should it lower its price, lower its value, but gain the market?
Tim Cook’s comments from earlier this month suggest that Apple will look to expand aggressively in India. But there are a lot of big decisions it needs to make before it can make inroads in the country, with or without iPhones made in India.