Apple further confirmed that it has begun the initial production of an unspecified "small number" of iPhone SE devices in its Bangalore plant, and plans to begin the first official shipment of Indian-created iPhones to local customers as soon as this month. Retail stores are expected to get their first shipment of iPhone SE handsets "as early as this week or next," according to people familiar with the manufacturing plans.
The manufacturing of Apple’s cheapest iPhone model, the SE, was handled earlier this month by Taiwanese contract manufacturer Wistron Corp., which has an assembling unit in the southern state of Karnataka, a state official with direct knowledge of the matter told The Wall Street Journal.The cost of the device remains unclear, with some Indian government officials hoping that the iPhone SE could be up to $100 cheaper than $320, the current average going rate for iPhone SE devices in the country. In most markets, including the United States, the iPhone SE starts at $399, but some analysts watching Apple's move in India argued for the need of an "aggressive" pricing on the smartphone in order for Apple to compete with the wide variety of cheap devices available.
Apple said in a statement that it has begun initial production of a small number of iPhone SE handsets in Bangalore and will begin shipping the Indian-made devices to domestic customers this month. The first devices could hit stores as early as this week or next, according to a person familiar with the matter.
Bringing its price down below $250 would help make it more affordable, analysts say, though it would still be well above the average smartphone price in India which research firm IDC says is around $150.Looking forward, some of the government officials said that Apple "could seek more production" within India down the line, potentially opening up manufacturing on other iPhones. Additionally, India is open to granting Apple more land and resources for its contract manufacturers to expand their operations throughout the country.
“Apple is likely to sell a good number of iPhones if it prices them so aggressively,” said Faisal Kawoosa, principal analyst at research firm CMR. “In three to five years, these users will be able to graduate to a standard-priced iPhone.”
Last year, Apple began discussing its expansion in India with Prime Minister Narendra Modi, who was trying to boost his "Make in India" initiative, at the same time as it looked to set up a local distribution center that could help consolidate its logistics and supply chain in the country. Apple's struggles in the country have been reported to center around the iPhone's expensive price tag -- a fact that CEO Tim Cook has admitted himself -- with a Strategy Analytics report last summer outlining a total 35 percent fewer iPhone devices sold in 2016 than in 2015.