May 18, 2017 9:11 pm JST

Apple to sell assembled-in-India iPhones this month in push for market share

MUMBAI (NewsRise) -- Apple will start selling its first domestically assembled iPhone SEs in India this month, as the iconic phone maker looks to beef up its presence in the fastest-growing smartphone market in the world.

Apple has a tiny market share in India, the second-largest smartphone market in the world, dominated by South Korea's Samsung Electronics and an array of Chinese rivals such as Xiaomi and Lenovo. In the quarter ended in March, Apple held just a 1.32% share of the nation's smartphone market, while Samsung led with a 26.50% share, data from Cybermedia Research showed.

India may be critical for Apple's growth in the next few years, as only a fifth of the nation's more than a billion mobile phone users have smartphones. The Cupertino, California-based company has been trying to make inroads in India as sales began to slow in developed markets.

"We are beginning initial production of a small number of iPhone SE in Bengaluru," an Apple spokesman said in a statement. "We'll begin shipping (iPhone SE) to domestic customers this month."

Apple started assembling the lower-priced phones at its contract manufacturer Wistron's plant in the southern Indian technology hub of Bengaluru. Taiwan's Wistron has reportedly set up a plant in the city to focus solely on assembling iPhones.

Experts say local manufacturing will allow Apple to bring down the price of iPhones in India, a market where the average selling price of a smartphone is around $120. The starting price of a basic iPhone SE in India is around 20,200 rupees ($314), based on the prices available on local online stores. The high prices of iPhones have been a major hurdle in Apple's quest to expand in the south Asian country.

To be sure, a bunch of foreign smartphone makers, including Xiaomi, Lenovo and OnePlus, have started assembling handsets in India in partnership with contract manufacturers after the government raised taxes on some foreign-made goods to spur local manufacturing. In March, Xiaomi said it is commissioning a second plant in India as demand for smartphones surged amid ultra-low prices for high-speed Internet.

iPhone SE could cost nearly $100 lower in India than the current models, thanks to local assembling, the Wall Street Journal reported earlier this week, citing people it didn't identify.

Apple has already tied up with retail distributors and resellers, offer interest-free financing, and has cut prices of some of its older models to bulk up the sales of iPhones in India.

A large chunk of India's smartphone sales are in the 15,000 rupees to 20,000 price range. Local manufacturing gives Apple the room to price its new phones in the affordable price band, analysts said.

"The basic agenda of this move is to draw more users into Apple's iOS ecosystem," said Faisal Kawoosa, head of telecoms practice at Cybermedia Research. "Apple is eyeing the large user base that buys the SE models at a lower price point and then is likely to upgrade to its flagship products."

--Dhanya Ann Thoppil

Asia300

Samsung Electronics Co., Ltd.

South Korea

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