Foxconn might be getting ready to set up a manufacturing plant in Maharashtra, India, with a focus on delivering Apple devices.
One year ago, Subhash Desai, Industry Minister of Maharashtra, unveiled details about the talks with Foxconn. The information at the time was that the company was looking to go beyond the Chinese borders to manufacture iPhones, and India was one of the first options on the list.
Reports indicate that the company will spend about $10 billion to raise a factory on the 1,200-acre plot of land. Should the deal come to pass, the construction time is estimated at 18 months before the facility will be open for business.
The expansion is part of a larger strategy that the OEM is working on, with the aim to increase the appeal and penetration of iDevices in developing markets such as South America, China and India. In repeated statements, Apple officials underlined the huge growth potential that India has for its iPhone market.
With an expanding demographic, India has many mobile consumers who are under 25, and that is one of Apple's main target audiences. However, it must be mentioned that even if India is the second largest handset market, the average annual income does not spike over $1500. With 70 percent of smartphones bought in India priced under $150, the American OEM might have difficulty in the country because of its high pricing.
The more affordable iPhone 5s could prove to be a winning ticket in India, as the price of the smartphone sits at about $300. To help the iPhone 5s gain lift, Apple decided to stop selling iPhone 4s and iPhone 5c smartphones in India earlier this year.
Another strategy for the company to gain a foothold in India is to open Apple Stores in the country's big cities, thus creating brand awareness and providing loyalists with superior service options. So far, this was problematic because of the foreign direct investment trade policy, which stated that single-brand retailers must get a minimum of 30 percent from local suppliers.
But the skies have cleared for the iPhone manufacturer when a committee from the Department of Industrial Policy and Promotion (DIPP) accepted the company's bid for exemption from the restrictive rule.
