Apple (NASDAQ:AAPL) is on the verge of moving assembly for its lower-cost iPhone SE to India in a move that could come as early as this summer, according to a report from The Information. At least one Apple supplier in China has been advised that it will begin shipping components to manufacturing partners in India beginning in July.
This seems to confirm earlier reports that Apple was planning to diversify more of its supply chain by moving additional production away from China.
This could be a boon to Apple in India. The company currently pays steep levies on products sold in the country. By moving production to India, Apple could avoid the 20% import tax, which would reduce the cost of the device, savings the company could then pass on to consumers. The iPhone SE currently sells for about $560 in India, much higher than the $399 price it fetches in the U.S. and much of the difference is the import tax.
Currently, Apple generates just over 2% of its overall revenue in India. By lowering the retail price of the device in the world's second most-populous country, Apple could become more competitive in a market that could be key to the company's future growth. In April, Apple announced the return of the iPhone SE, a move that many chalked up to the need for a more affordable device, better suited to emerging markets like India.
Senior executives from Apple have held talks with top ranking government officials in India in recent months, and the company could eventually move as much as 20% of its production to India over the coming five years. One government official, who spoke on the condition of anonymity, said the country expects Apple to manufacture about $40 billion worth of iPhones in India.