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Apple To Start Making iPhones In India, Says State Government (bbc.co.uk)

vasanth quotes a report from BBC: Apple is to start making iPhones in the southern Indian state of Karnataka, the state's government has said. Ministers said Apple would start an initial manufacturing operation in the state, whose capital is the tech hub Bangalore, in April. The tech giant has a 2% share of India's mobile phone market, well behind South Korean rival Samsung. Apple has yet to officially confirm the plan, saying only that it is keen to "invest significantly" in India. But Priyank Kharge, minister of information technology and biotechnology in Karnataka, 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." Reports said the plant is being set up by Taiwanese manufacturing company Wistron Corp. Apple has held a series of meetings with government representatives at both state and national level and is understood to be pressing for concessions before going ahead with such a move. Apple is currently unable to set up its own branded stores in India, which has a raft of rules to curb 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. Priyank Kharge, IT minister for the Indian state of Karnataka, said Thursday on Twitter: "Apple's intentions to make iPhones in Bengaluru will foster cutting-edge technology ecosystem [and] supply chain development in the state."

62 comments

  1. "India" is not how you spell indiana by Anonymous Coward · · Score: 0, Flamebait

    This is your FORMAL WARNING apple. Sad!

    1. Re:"India" is not how you spell indiana by jrmcferren · · Score: 1

      Manufacturing in India doesn't mean they can't use the Chinese factories for Asian Market or to build a US factory for the North American market.

      --
      sudo mod me up
    2. Re:"India" is not how you spell indiana by s122604 · · Score: 1

      The better, or dear leader is going to be very unhappy.

    3. Re: "India" is not how you spell indiana by Anonymous Coward · · Score: 0

      He has been hiding hiv. He looks sicker and sicker each day. He looks worse than jobs at the end. Cook has had many dirty cocks in his ass. And his mouth.

    4. Re:"India" is not how you spell indiana by currently_awake · · Score: 1

      The purpose of building outside the USA is to lower costs. India is cheaper than China, they just lack the infrastructure required for this. If they can get Trump to pay for the infrastructure in India then it works. India, Indiana, it's an American state, right?

  2. Re:Apple to start making fake news by Anonymous Coward · · Score: 3, Funny

    An alternative fact is that Apple is making all of its products in the USA and creating thousands of jobs. GO TRUMP!

  3. There Goes the QA... by oh_my_080980980 · · Score: 1

    "And by getting Apple to set up in Karnataka, he hopes says it should help promote to region's ambition to become a location for high-end manufacturing." http://www.bbc.com/news/busine...

    1. Re: There Goes the QA... by Anonymous Coward · · Score: 0

      Is apple on it continued quest for a lack of quality and reliability and their products originally Apple products were very well-made but I'm afraid of buying anything from them lately after going through four or five iPhone 6 phones in under 14 months they finally upgraded me to a 6S which now just under a year has issues with the home but I am afraid to buy a new MacBook as I don't trust apples quality yet I'm trying to move away from Microsoft due to zero privacy even for your own files on your own computer and updates that I can't control and telemetry that I have no idea what they're collecting screw Microsoft. Apple has a huge opportunity with the Mac line if they were to present how much more they care about your privacy than Microsoft and you can still decide if you want to do an update to the OS. The new MacBook Pro not only concerns me with the build quality and longevity but a horrible keyboard and lack of any legacy ports makes this not a pro machine let alone the fact that you cannot upgrade anything inside or replace a failed component like a memory chip or SSD which almost all will eventually fail. My personal experience with any product I've touched out of India is horrible quality and this does not just include manufactured goods it also goes to their technical support centers

    2. Re: There Goes the QA... by unixisc · · Score: 1

      If they are building them just for India, why do their QA levels have to be the same as that in the US?

  4. Re:Apple to start making fake news by Anonymous Coward · · Score: 0

    TRUMP will get Americans to work all day and night putting the next iphone together - believe me folks - you're jobs are gonna be yuuuge and great! TRUMP!

  5. India First by Anonymous Coward · · Score: 0

    "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."

    That's a great idea.

    1. Re:India First by dgatwood · · Score: 1

      Do Indian companies make any components that could go into an iPhone? Last I heard, there weren't any fabs in India, which probably means there aren't any SMT parts makers, either. I mean, I suppose they could mill the enclosures, fabricate the PCBs, and mould the Gorilla Glass, and maybe say that it is 30% by weight, but I don't think that's what they mean. The best they could do is "source" the parts from an Indian company that then imports them from China/Japan/Taiwan, but I fail to see how that's going to encourage manufacturing of electronics in India in any meaningful way. Time will tell, I suppose.

      --

      Check out my sci-fi/humor trilogy at PatriotsBooks.

    2. Re:India First by ghoul · · Score: 1

      India does have fabs just not the latest ones which can make CPUs. There are many fabs making chips for televisions, radios and phones. Most of the surrounding chipset can be locally sourced with maybe the touchscreen, CPU and battery being imported. Also the example of Maruti (Suzuki India) shows that once the final assembly moves to India the part manfacturers also move lines to be near the final assembly. It even saves on transport costs for Apple for phones to be sold in Indian Subcontinent or Africa as India is closer to Africa than China. China has become expensive and other competing countries like Vietnam dont have a large enough local market to make manufacturing locally worth it so slowly most manufacturing is going to move to India (if it stays manual) or move to USA (if its automated).
      Plus Apple can play games with the value - Apple employs more than 20000 contractors from big Indian outsourcing companies. These contractors provide at least 20-30% of the value of the software which goes into an iPhone and the support around it. That support and R&D cost is easily 30% of the cost of an iPhone so Apple can claim 10% value of an iPhone based upon using outsourced IT and software development. It can claim another 10% as cost of the Retail stores and logistics in India. SO it actually needs to move only 10% of the manufacturing value to hit the needed 30%. By doing this minimal change they beat a 50% import tax and get to open dedicated Retail Stores. IT just makes sense. Should have and would have happened long ago if Jobs hadnt hated India so much (he went there as a hippy in his pre Apple days and had his luggage swindled and had to beg for his food and travel money to get back) Cook doesnt have the same hangups about India.

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      **Life is too short to be serious**
    3. Re:India First by Anonymous Coward · · Score: 0

      India does have fabs

      According to this, they were squabbling about failed "the country’s first semiconductor wafer fabrication unit project" as late as 2013.

    4. Re:India First by currently_awake · · Score: 1

      American companies are very good at "Creative Accounting" to make gorilla glass + enclosure make up 50% of the cost of the phone, thereby "Product of India" achieved. The latest Intel fab will use smaller geometries, so new fab needed. May as well get it out of "Ground Zero" of a China/Taiwan war at the same time. China is getting expensive, it's time to move.

  6. skeptical by supernova87a · · Score: 2

    I do not believe Apple will find it cost effective or find it tolerable to build phones in India to the same quality as it is used to. Now, of course they will have done their own extensive analysis, but I imagine the following issues in plenty (even just supplying phones to the domestic Indian market):
    - unreliable electric power (could be mitigated with huge backup generators)
    - unreliable / poor quality road transport
    - much less extensive or linked supply chain
    - related to this, lower general quality of contributing required parts
    - manufacturing and trade zone subsidies less transparent, more bribery
    - more political interference at all levels of government interaction - simply refer back to the requirements to sell in India to begin with

    I predict, and I would love to be shown wrong, that Apple will find this environment to be frustrating to no end. There are reasons that major electronic hardware manufacturers do not have world leading operations out of India.

    1. Re:skeptical by alvinrod · · Score: 4, Insightful

      It doesn't matter if it costs more, that's already an accepted fact. What matters is that he increased cost is still less than the additional cost they incur manufacturing elsewhere. With China right next door, India will never be a major manufacturing center for electronics, but if supplying the market in India (as small or large as it may be) allows Apple to generate more profit, they'll make the move. This is Cook's area of expertise, so I suspect that if Apple moves forward with these plans that they've figured out how to make money with this arrangement or expect the market in India to grow enough to compensate for the added manufacturing costs.

    2. Re:skeptical by Anonymous Coward · · Score: 0

      And, as far as I know, India is not America, therefore Trump will start to tax them a shitton at some point in the next 4 years.

    3. Re:skeptical by Anonymous Coward · · Score: 1

      Xiaomi is already in India. Foxconn makes phones for them in India so I suspect it will not be a bake from scratch endeavor by Apple.

    4. Re:skeptical by Anonymous Coward · · Score: 0

      The electric power issue is irrelevant, Apple will almost certainly use clean solar power like they do with their data centers. They'll just use batteries instead of the grid as a backup.

      And doesn't India have an excellent train system? I believe they even have trains to China. If they can't get a high quality part locally, they'll ship it in. They need 30% Indian content for compliance, not 100%.

      Since they're getting subsidies (they shouldn't, it's not like the biggest company in the world needs them to comply with the law) the bribes will hopefully have to be large to compensate, with the bonus that large bribes will increase the chances that the corrupt bureaucrats will be caught.

      The bureaucracy may be an issue.

    5. Re:skeptical by monkeyxpress · · Score: 2

      India is not going to be making the display, battery or silicon. At best they might be assembling the boards there, building the case parts, and assembling the final product. My guess would be Apple will be leaning heavily on the India govt to ensure they are only doing that final bit.

      In any case, the critical parts of all those components are heavily automated. Board assembly is pretty much completely automated these days. Most of the case machining is automated (I think they still run drill & tap machining centres with operators manually loading, but they may have moved to 5-axis by now). The biggest issue is probably on final assembly, but I can't imagine Apple has not been working with Foxconn on automating much of that by now as well, given the rising labour costs in China and situations like India, Brazil and now Trump. It isn't hard, there just wasn't any reason to bother before.

      If you visit a modern electronics contract manufacturer, most of it is people in anti-static coats loading up parts into part feeders. There is very little hand labour left, unless you are talking very low volume.

      The most annoying thing for Apple is that they had to bother doing this, when there was a perfectly good robot factory in China that could supply the stuff.

    6. Re:skeptical by Anonymous Coward · · Score: 0

      He want to higher import taxes. That's stuff from around the world to the USA.
      Well - as that stuff is made in India and is exported around the world (except for the USA), that import tax is completely useless.
      The whole world will have a nice price, while Americans pay at least 10% more.
      Congratulations. That will show them!

    7. Re:skeptical by Anonymous Coward · · Score: 0

      1) India has become power surplus. In Bangalore the electric infrastructure is good enough for uninterrupted power.
      2) "Poor quality road transport" - not really. In any case they are importing from China and supplying to distributors on the same "quality" of road transport.
      3) Supply chain and parts - not a factor at all for the kind of assembly apple wants to do
      4) India doesn't want to dole out subsidies unless there's a major investment. At the moment apple is starting a small assembly operation of phones as a first offering only to please the indian govt. into granting more favours in future.

    8. Re:skeptical by Anonymous Coward · · Score: 0

      Fuck slashdot it has degenerated since Taco left, now the fucked up kids are in school without ever growing up. Fuck off!

    9. Re:skeptical by ghoul · · Score: 1

      India taxes any imports of phones at 50%. iPhones cost 1000$ plus in India. If Apple manufactures in India they can finally start competing in the Indian market. This is not about forcing all production to India. This is about balance of trade. After gold the highest dollar outflow from India is for electronics. The Indian govt is trying to minimize this by forcing partial(30%) manufacturing in India. No different from US imposing import taxes on BMWs made in Germany but not on BMWs made in South Carolina

      --
      **Life is too short to be serious**
    10. Re: skeptical by Anonymous Coward · · Score: 0

      Why taco leave ?

    11. Re:skeptical by plover · · Score: 1

      Maybe Apple has figured out the magical formula to scale "down" production to remain profitable while delivering just enough devices for a single nation. Normally, manufacturers want to scale up to realize the cost benefit of global production, but that doesn't work in India. They never want to import anything they don't have to.

      India has dialed in on the way to make stuff happen locally. They recognize that every job created boosts their middle class, and reduces their overall poverty, so they don't seem to care much if the jobs or the output is similar to the rest of the planet. As long as paychecks are going out to more of her citizens, it's a big win for them.

      --
      John
    12. Re:skeptical by backslashdot · · Score: 1

      India's government is making a mistake with its protectionist policy. The taxing of the iPhone for importing it is detrimental to the Indian people. The iPhone offers a value to the Indian consumer that in turn would help them economically (easier communication, entertainment etc). Putting a tax on the iPhone makes a better quality of life only available to Indian elites.

      By making the phones in India it is only a slight improvement on the idea of import taxation, there will be some cost to Apple (and therefore the consumer). Either the phone will be of slightly less quality or the phone's price itself will be higher than it needs to be. By having to pay more for a less quality iPhone (in comparison to tax-free import), it means less people will be able to afford iPhones. In addition it will make it harder for Apple to innovate because it will have to re-tool and manage multiple sites.

    13. Re:skeptical by ghoul · · Score: 1

      India govts job is not to help Apple innovate. Its to build manufacturing ecosystems in India so Indians can have employment. Access to an Indian consumer market is a good lever to use. India already has better and cheaper phones than the iphone so its not a critical import its a luxury consumption item.

      --
      **Life is too short to be serious**
    14. Re:skeptical by backslashdot · · Score: 1

      If India has better and cheaper phones then why are people buying iPhones? Obviously your opinion about "better" is not the same as some other people. Maybe you shouldn't get to decide what's good for them?

  7. Re: Apple to start making fake news by Anonymous Coward · · Score: 0

    Useless parasites like yourself can migrate to Canada, as you pledged to do. Start packing.

  8. Re:I've known about this for a few weeks now... by Anonymous Coward · · Score: 0

    Makes sense... Grease a palm and have your own chunk of land free from government involvement until it is time for another payout. Apple has to use that cash that they are keeping out of the US for something I guess.

  9. Excellent by ruir · · Score: 0

    Finally iPhones will support Engrish. About time shall I say. https://www.buzzfeed.com/tasne...

    1. Re:Excellent by Anonymous Coward · · Score: 0

      I think you meant "Hingrish"

    2. Re:Excellent by Anonymous Coward · · Score: 0

      "Click the needful."

  10. Re:I've known about this for a few weeks now... by Anonymous Coward · · Score: 0

    What is the land now? I fear animals and an ecosystem being destroyed with a toxic factory, because jerbs.

  11. I like it by Anonymous Coward · · Score: 0

    They have no trouble raising US$10 billion in a bond issue though. So we take American money and hide it overseas, and we give the jobs to India. Go globalism. Has anyone even bothered to work out what happens when no one can earn money in the US anymore (the current situation - most of that borrowed $10 billion is someone else's debt anyway). Who is going to buy their products? It's not rice or wheat they are selling, it's a high end item. At some point America runs out of disposable income. Again.

  12. Re: Apple to start making fake news by Anonymous Coward · · Score: 0

    We don't want them in Canada. Your country bred them, you keep them.

  13. Don't let Apple manufacture in your country by Anonymous Coward · · Score: 0

    for them, it's just exploiting your cheap labor for massive profits, and they get to eventually take a larger share of your market. They are the only winners, that's why they go to you and China for manufacturing.

  14. Value of the components. by lucaiaco · · Score: 1

    By 30% of the product, they mean 30% of the value of the components.This is a breakdown of the cost for each component in the IPhone 5. http://www.digitaltrends.com/m...

  15. Re:Americans love cheap slave labor! by Anonymous Coward · · Score: 0

    Don't be so salty, Pajeet.

  16. Re:Americans love cheap slave labor! by Anonymous Coward · · Score: 0

    its ok India has Americans bank account details, personal info, mortgage documents, credit scores, company secrets, weapons invetories, all their code and algorithms, everything you would ever want for ID theft and insider trading in fact those dumb cowboys actually paid them to take it.

    I'am sure those 100 rupee a day workers will supplement their income elsewhere when they realise they are being taken for fools ;)

  17. They will do the needful..... by Anonymous Coward · · Score: 0

    ......in their designated shitting streets.

    1. Re: They will do the needful..... by Anonymous Coward · · Score: 0

      That means all streets that run east-west and north-south, right?

  18. Re: Apple to start making fake news by Anonymous Coward · · Score: 0

    When can we deport Bieber then?

  19. All of the H1-B visas and tech news reminds me... by Anonymous Coward · · Score: 0

    of a quote by author, Neal Stephenson, from his seminal sci-fi/cyberpunk book, Snow Crash :

    “When it gets down to it — talking trade balances here — once we've brain-drained all our technology into other countries, once things have evened out, they're making cars in Bolivia and microwave ovens in Tadzhikistan and selling them here — once our edge in natural resources has been made irrelevant by giant Hong Kong ships and dirigibles that can ship North Dakota all the way to New Zealand for a nickel — once the Invisible Hand has taken away all those historical inequities and smeared them out into a broad global layer of what a Pakistani brickmaker would consider to be prosperity — y'know what? There's only four things we do better than anyone else:
    music
    movies
    microcode (software)
    high-speed pizza delivery”
      Neal Stephenson, Snow Crash

  20. Inefficiencies less than tariffs? by perpenso · · Score: 1

    If inefficiencies add X% to manufacturing costs but import tariffs would be X+5% would it not be worth it? As long as Apple does not have to heavily invest in plant, property and equipment or can recoup such costs fairly quickly.

  21. Re: Apple to start making fake news by Anonymous Coward · · Score: 0

    Yeah for the fuck sake why would you give decent jobs to americans Apple, to your social enclave fellow citizens who are the ones actually protecting your safety and wealth inside of the enclave and outside if deemed. Are Indians going to protect the safety and wealth of Apple if America falls into civil war and poverty or if America goes to war outside its social enclave borders?! How stupid you americans can be, you pay with your life of misery and blood practically every fucking second of life of extreme happiness of your neo feudal lords, this is what you have become once the greatest nation on earth leading the humanity on the endeavour of science, just a nation of serf plebes.

  22. This is highly doubtful. by tlambert · · Score: 1

    This is highly doubtful.

    Given the huge amount of money India extorted out of Microsoft after Microsoft bought Nokia, "Oh, we found a bunch of taxes you didn't pay...", anyone with deep pockets, like Apple, would have to be incredibly stupid to manufacture phones in India.

  23. Not making, but assembling. by Anonymous Coward · · Score: 0

    Not making, but assembling. So no tech is imported but used assembly machines. The local government is as dumb as a villager.

  24. The most surprising thing about this by Anonymous Coward · · Score: 0

    The most surprising about this is that Apple are apparently going to manufacture iPhones themselves, while in the past 15 years they have outsourced production of everything they sell. Apple didn't consider manufacturing as part of its core business. It's interesting that they are reconsidering that position.

  25. Re:All of the H1-B visas and tech news reminds me. by Anonymous Coward · · Score: 0

    and even that's not true. Rap is not music. Movies yeah. Software nope, spyware yes. Pizza delivery? wat...

  26. ipoo by Anonymous Coward · · Score: 0

    ipoo in the loo, pajeet

  27. Re:2% market share by unixisc · · Score: 1

    In fact, iPhones had the same marketshare as the Lumia. In fact, in India, when apps are advertized, one sees as many that are available on Windows Phone as are on Android or iOS

  28. Can't be done - Apple said it! by Anonymous Coward · · Score: 0

    There was an article in the NYT in Jan 2012 where some Apple exec mentioned they couldn't move jobs back to the US because the whole supply chain was in China. So how do they now figure to open up a factory in India?