Apple hopes to take over the Indian market with locally made iPhone SE

It was reported a few weeks ago that Apple was again engaged in negotiations with the Indian government regarding relocation of manufacturing plants to the burgeoning South Asian economy. Apple was reportedly seeking major economic incentives at the time—though it is unclear whether these concessions were given or not. Reuters is now reporting that Apple will begin assembling the iPhone SE at a contracted manufacturing plant in Bengaluru over the next few months.

Apple is beginning to manufacture in India because they want to sell cheaper phones there to appeal to the market. India represents a huge market that is yet to be tapped: According to research firm Counterpoint, while Apple owns 60% of the high-end phone market, overall, this share adds up to a mere 3 percent of the total Indian market. In order to reduce manufacturing costs and import tariffs, local production is a must. Previously, Apple sought to import and sell refurbished the iPhone SE—a plan that was rejected by PM Modi. By using a partnered manufacturer (Winstron Corp) to assemble Apple's cheapest handsets, they will be able to provide the Indian market with the most competitive prices possible. Will it be enough to make the iPhone SE a realistic purchase for the other 97% of the market in a country where roughly 24% of the population lives on below US$1.25 purchasing power parity a day? Time will tell.