According to an official with knowledge of the company’s plans, Foxconn hopes to step up production capacity and “diversify to even higher models going forward.” Today’s report sees Foxconn’s plans to move some of its production outside of China begin to take shape, following the manufacturer’s trial production of the iPhone X earlier this month.
News about Foxconn’s plans to produce high-end iPhones in India emerged late last year. According to a Reuters report, Foxconn invested $356 million to expand an existing plant and take on the new iPhone production, creating as many as 25,000 jobs in the process.
Foxconn has been considering expanding its production plants in India as a way to diversify its supply chain away from China, where most of the Taiwan-based firm’s facilities currently reside. Apple manufactures most of its iPhones through Foxconn, but the latter’s growing India base provides security in the face of Apple’s vulnerability to rising U.S.-China tensions over trade and technology.
Previously, Apple partnered with Wistron to produce iPhones in India, including the iPhone SE and iPhone 6s. When building iPhones in India, Apple is able to avoid import duties placed on imported smartphones and their components. More production in the country also helps Apple meet India’s 30 percent local sourcing requirement that would allow Apple to open its own local retail stores.
Production of the iPhone X family in India appears to be part of Apple’s revamped India strategy, which also includes better and longer-lasting retail deals with higher sales targets, the opening of official Apple retail stores in India, “overhauling” the company’s relationship with independent retailers, and improving apps and services “aimed more closely at Indians.” Due to the high price of iPhones in India, and other reasons, Apple has continually struggled in the country, leading to the new strategy.