Back in May 2017, Apple started producing the first-generation iPhone SE in India. This helped solve a few issues. First, it lowered the price of the phone by about $100 since it wasn't eligible to be socked by an import tax. That $100 made a big difference to consumers in India; even though it is the second-largest smartphone market in the world after China, it is a developing market and paychecks are low. That's why Xiaomi's value for money strategy plays so well in the country.
Apple asks its supply-chain for components to help it produce the iPhone SE (2020) in India
producing other models in India including the "incredible iPhone 6s." Eventually, Apple started making more complex models in India including the iPhone XR. According to AppleInsider, sources say that Apple has told at least one of its suppliers in China to start sending components for the iPhone SE (2020) to its contract manufacturers in India. This will allow Apple to build the new version of its budget handset in India.Also, by producing certain iPhone models in India, Apple was working with the Prime Minister's "Make in India" program designed to promote certain industries in the country. Soon, Apple was
While the original iPhone SE was built using the same design found on the iPhone 5s, the 2020 iPhone SE takes after the iPhone 8. That means it sports a 4.7-inch LCD display with a 750 x 1334 resolution. Instead of the 10nm A11 Bionic chipset used on the iPhone 8, which carries 4.3 billion transistors, the iPhone SE (2020) is powered by the 7nm A13 Bionic and its 8.5 billion transistors. The higher the number of transistors inside a chip, the more powerful and energy-efficient it is. Apple also gave the iPhone SE (2020) a 50% hike in memory to 3GB from the 2GB found in the iPhone 8. The iPhone SE (2020) is priced at $399 for the 64GB model in the U.S. but in India it is priced at 42,500 Rupees equivalent to $556 USD.
Some of the handsets that Apple is having manufactured in India are being shipped out of the country. Last month, an Indian government official said, "We expect Apple to produce up to $40 billion worth of smartphones, mostly for exports through its contract manufacturers Wistron and Foxconn availing the benefits under the production-linked incentive (PLI) scheme."
Last month we told you that the removal of a clause connected to India's PLI has opened up the possibility that Apple will move more iPhone production to the country. That clause valued plants and machinery imported from South Korea and China at a 40% discount. Under the terms of that clause, the equipment that Apple would need to move some production from China to India would be discounted allowing it to manufacture a smaller number of iPhone units in the country. Now that India has removed that clause, Apple could move 20% of its iPhone production to India over the next five years.
Last year when it appeared that the iPhone would be taxed in the states as a Chinese import, there was talk about Apple moving iPhone production to India. But the facilities in the country are not large enough for Apple to replace all of the iPhone units it makes in China. Vietnam is a more likely location and the company has a better shot at putting together a supply-chain in Vietnam that can supply Apple with the components in the quality and quantity it needs. But until that actually happens, India is a good place for Apple to start the process of moving production out of China.