Apple begins assembling iPhone 11 in India

Apple's contract manufacturing partner Foxconn has started to assemble the current generation of iPhone units - the iPhone 11 lineup - in its plant near southern city of Chennai, a source familiar with the matter told TechCrunch.

A small batch of locally manufactured iPhone 11 units has already shipped to retail stores, but the production yield is currently limited, the person said, requesting anonymity as matters are private. Apple, in general, has ambitions to scale up its local production efforts in India, the person said.

The local production of current iPhone 11 models illustrates Apple's further commitment to India, the world's second largest smartphone market, as it explores ways to cut its reliance on China, which produces the vast majority of iPhone models today.

Apple's contract manufacturing partner Taiwan-based Wistron first began assembling older iPhone models in 2017. But until now, Apple has not been able to have an assembly partner produce the current generation iPhone model in India.

Wistron, which has locally assembled older iPhone SE, iPhone 6s, and iPhone 7 models in the past in its Bangalore plant, currently assembles iPhone XR units in India. Apple discontinued the local production of iPhone SE and iPhone 6s last year, the person said.

Piyush Goyal, India's Minister of Commerce and Industry, tweeted on Friday that Apple had begun assembling iPhone 11 models in India. Apple did not comment on this story.

Assembling handsets in India enables smartphone vendors - including Apple - to avoid roughly 20% import duty that the Indian government levies on imported electronics products.

Xiaomi, Vivo, Samsung, Oppo, OnePlus, and a range of other smartphone companies, have inked deals with contract manufacturers across India in recent years to produce much of their locally sold smartphones units in the country itself.

Xiaomi, which has been the top smartphone vendor in India since late 2018, said earlier this month that nearly every smartphone it sells in India is produced in the country.

Apple has been exploring ways to ramp up its production in India for years, but the company has struggled to find contract manufacturers that adhered to its safety and quality standards, people familiar with the matter have told TechCrunch.

News outlet The Information reported in March that some of Apple's other contract manufacturers have attempted to enter - or expand in - India, but have run into regulatory and local laws issues. Pegatron, another assembly partner of Apple, plans to set up a local subsidiary in India and begin operations in the country, according to Bloomberg.

Foxconn, which counts India as one of its biggest markets, plans to invest $1 billion in its operations in the country, Reuters reported earlier this month. New Delhi announced a $6.6 billion plan to attract top smartphone manufacturers in June this year.

Apple plans to launch its online store in India in a few months and open its first brick-and-mortar retail store next year, chief executive Tim Cook announced earlier this year. The online store's launch in India remains on track despite the pandemic, a person familiar with the matter said.

The iPhone-maker currently commands roughly 1% of the smartphone market in India, but is among firms that dominate the premium handset segment (phones priced at $400 or above). Apple has also been the least impacted smartphone maker in the country amid the coronavirus pandemic.