Indian government officials announced that Tech giant Apple Inc. (NASDAQ:AAPL) is set to start building iPhones in the southern Indian state of Karnataka.
Priyank Kharge, minister of information technology and biotechnology in Karnataka revealed Apple Inc. (NASDAQ:AAPL) plans to setup an initial manufacturing operation in the state, whose capital is the tech hub Bangalore, in April.
Apple Inc. (NASDAQ:AAPL) has mere 2% share of India’s mobile phone market, well behind South Korean rival Samsung.
Meanwhile Apple has still not confirm the plan, saying only that it is keen to “invest significantly” in India.
However Mr. Kharge, told the AFP news agency: “We have an understanding with Apple and we expect them to start manufacturing in Karnataka by the end of April.” According to reports, the plant is being set up by Taiwanese manufacturing company Wistron Corp.
Even with the low proportion of sales, Apple has almost 50 percent the market for premium phones, which start at around $450 an item, and its sales are surging rapidly.
Apple reportedly has held a series of meetings with government representatives at both state and national level and is assumed to be insistent for discounts before going ahead with such a move.
Apple’s biggest manufacturing partner is Taiwanese giant Foxconn, which runs the largest iPhone factory in the world in China.
Apple is at present unable to set up its own branded stores in India, which has a raft of rules to limit the activities of foreign companies.
For it to be able to sell direct to customers in India, Apple would have to source 30% of the components of its products locally.
Apple recently posted its first increase in sales in nine months after strong Christmas sales of the iPhone 7. It had suffered three quarters in a row of dropping revenues as surging competition, predominantly from Chinese rivals, hit sales of the iPhone.
Moreover Mr.Kharge said through getting Apple (AAPL) to set up in Karnataka, he can promote the region to become a location for high-end manufacturing.