'iPhone' City In China Is A Success: India May Be Apple's Next Stop

• comments
• 
• 

The World has an 'iPhone city'. Yes, that's absolutely true, however strange it may sound. Zhengzhou a lesser known Chinese city, has had this honor for the last few years.

According to the New York Times, the state of the art facility was built several years ago in order to help Apple, the current global leader when it comes to premium phones, tablets and computers. The factory set up here is owned and operated by Apple's manufacturing partner Foxconn and has the capacity to produce a staggering 500,000 devices each day.

Reportedly the local government has been highly cooperative to this initiative, handing out more than $1.5 billion to Foxconn for the factory and its various facilities. China has been alluring the overseas multinationals like Hewlett- Packard, Dell and Samsung to flock around China in search of low cost production line and an opportunity to set foot in currently the biggest consumer market in the world.

On the other hand as per the CNBC reports, Apple has been facing steep local competition from indigenous brands like Huawei, Lenovo and others who make quite good quality phones at dirt cheap prices. While looking for an alternative, India is on Apple's radar. It senses great potential in Indian market for both production and consumption.

The prime reason for preferring India is its young population, half of which is aged under 25. Also there is an increasing fascination for new gadgets across all budgets. Apple CEO Tim Cook said "Our iPhone sales in India were up over 50 percent in fiscal 2016 compared to the prior year, and we believe we're just beginning to scratch the surface of this large and growing market opportunity"

Despite the promising sales, Apple's premium price tag remains an intimidating factor for many short-pocketed Indian consumers. In a highly competitive phone market like India, pricing is a tricky affair. Players like Samsung, Lenovo and India's very own Micromax have managed to keep it low. To match this price point Apple will need new strategies.

Despite the severe competition Apple is still assured of India as a profitable consumer market but the million dollar question remains the same - Is India the answer to Apple's production woes?

Right now the Indian infrastructure may not be capable of handling such a large scale production but with the help and support of the Indian government the production facility remains a possibility. This will serve Apple on two counts, First the cheap - Manpower, real estate and other business related expenses will lower the product cost ensuring lower selling price and Second the low prices will automatically increase its sales output.

Future of another iPhone City is uncertain but there is something definitely cooking at Apple's kitchen.