TECH

Hardware Manufacturing Is Just One Part Of Apple's India Game

The world's leading brand is betting long on India.

07/02/2017 4:16 PM IST | Updated 07/02/2017 6:54 PM IST
Regis Duvignau / Reuters

The announcement by the Karnataka government that Apple will be manufacturing the iPhone in the state soon has been welcomed by all in India. The benefits of the world's most popular smartphone setting up a production base here are self evident — there will be many direct as well as ripple benefits for the local electronics industry and small businesses. Another welcome indication is that Apple is thinking long-term about India, not just as a market but as a base for its operations.

While the iPhone manufacturing announcement made news, the Cupertino, California, based electronics behemoth had made some key announcement last year as well, coinciding with CEO Tim Cook's India visit. Apple had announced then that it will open two development centres here.

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The company will set up an iOS design and development centre and accelerator in Bengaluru, which will also host sessions for startups and developers, and help them make better apps. The other centre, located in Hyderabad, will focus on Apple maps, a product that needs to improve by leaps and bounds. Apple has received plenty of flack for the product, which was launched in 2012.

Apple has made a sound business decision in opening the two centres in India. It is investing in development which would cost a lot less here than it would in the US. The Indian service industry is known for providing great solutions at a much cheaper rate. In fact, the new immigration orders issued by US president Donald Trump could make it harder to send developers to the US from India. So, India, with its huge engineering resources, can be a great alternative location for development and research.

Apple has been concentrating on services as well. A weak link for the company at one point, the sector has done very well under VP Eddie Cue, registering revenues of $7.14 billion in the last quarter. Apple Music now has 20 million customers worldwide.

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The service was launched in India along with the other markets and the local pricing was on point — ₹120 for an individual plan and ₹190 for a family of three people. The new student plan is priced at just ₹60. Apple's India team has been making curated playlists and working with artists here to feature them and release exclusive music.

Apple has also pushed many services and apps for Apple TV. While local clientele for the device is limited, the company is pushing Indian developers such as Hotstar and Eros Now to release apps for the global market.

With the China iPhone market showing signs of plateauing, India could be a land of opportunity for Apple, for making and selling hardware, as well as developing software and services. Apple is doing well in India, having already grabbed the second place in terms of revenue in the smartphone chart. It sold a record 2.5 million iPhone units last year. With local manufacturing, the price of the iPhone could drop, to the benefit of the Indian consumer.

While Apple wants the Indian government to give it initial tax breaks for setting up manufacturing units here, the Department of Industrial Policy and Promotion (DIPP) hasn't yet taken a decision on the matter.

A climate of uncertainty hovers over the tech industry in America, as well as globally, in the wake of the assumption of the American presidency by Donald Trump. Apple is among the many Silicon Valley companies openly opposing specific presidential orders. Specially in the current scenario, the idea of decentralising operations to locations globally must be finding purchase at Apple.

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