The release, signed by state IT minister Priyank Kharge, said Apple’s intentions to manufacture in Bengaluru “will foster cutting edge technology ecosystem and supply chain development in the state, which are critical for India to compete globally.” Though it did not provide a timeline, production is expected to begin in June.
India will be only the third country globally to assemble iPhones, an indication of how important the country has become for one of the world’s most valued companies.
The release said state ministers and officials had met with several senior Apple executives including Cupertino-based Priya Balasubramaniam, VP – iPhone operations, Dheeraj Chugh, director – iPhone operations, and Ali Khanafer, senior manager – government affairs (India and Middle East).
Taiwanese company Wistron, an original equipment manufacturer (OEM) of Apple, will make the iPhones out of its facility in the city’s industrial hub of Peenya. In December, Apple had published job openings on its portal for several positions at its OEM in Bengaluru, including an iPhone operations program manager whose responsibility would involve leading the OEM operations team, managing component readiness, ensuring parts availability, quality and collaborating with cross-functional supply chain teams.
The government said discussions are on with Apple for collaborations in other areas too. It did not specify what these areas are, but the government is said to be pushing for manufacture of some phone components too, so as to create a manufacturing ecosystem in the city.
In May, Apple had announced a design and development accelerator in the city to grow the iOS developer community and also guide Indian developers to leverage Apple’s programming language Swift and build apps for Apple TV and Apple Watch.
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“We made concerted efforts to reach out to Apple directly. We want to create a conducive environment for global majors like Apple so that we emerge as their preferred partner in their India growth story,” Kharge told TOI. Gujarat, Maharasthra and Telangana too were competing for the Apple facility.
Apple uses a fairly complex supply chain. The parts for the iPhone, iPad, iPod and Mac are manufactured, mostly by third parties, across 28 countries. It has 766 suppliers, of which 346 are based in China, 126 in Japan, and 69 in the US. There is one in India, a unit of Flextronics in Sriperumbudur in Tamil Nadu.
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“There is no component ecosystem in the country besides what Samsung has done in India. With Apple’s China sales slowing down, it’s opportunity India, and Apple might look at a different SKU, distribution and sourcing model to make it affordable to millions of aspiring customers,” said Navkendar Singh, senior research manager – mobile devices research, India and South Asia, in research firm IDC.
Vishal Tripathi, research director in Gartner, said the move to assemble in Bengaluru is a good starting point that positions India as a strong alternative site to China and Taiwan that have been strongholds in manufacturing. “It has put India in a different stead,” he said.