Reports have emerged that iPhone contract manufacturer Foxconn Technology Co. Ltd (2354.TW) is looking to open a $10 billion facility in Maharashtra, India. Sources have told ET Now that the plant will occupy 1200 acres and Foxconn is close to signing the deal.
India is the world’s second largest smartphone market and Apple Inc. (AAPL) currently has only 2% of it. The average smartphone purchased in the country costs less than $150 and most of India’s burgeoning middle class cannot currently afford the phone. The Indian government has also denied Apple permission to sell refurbished phones in the country.
Last week Tim Cook sounded optimistic about how India will feature in the company’s future when he spoke to CNBC. According to him, India has “huge market potential” and the roll-out of LTE internet service in the country this year will only help sales. He confirmed back in February that Apple plans to open retail stores in India soon too.
By all likelihood, a manufacturing plant in India will bring down local prices for the iPhone and finally allow Apple to expand its market share. This is also good news for the Indian government and its ‘Make in India’ initiative that aims to create 6 million manufacturing jobs over the next six years and attract foreign investment.
India’s commercial capital, Mumbai, is located in Maharashtra and the state is one of India’s most affluent. Other foreign companies that manufacture in the state are Mercedes, Audi, Volkswagen and Fiat.
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