Apple does not have a local manufacturing unit in India.
Apple has 15% of the global smartphone market share, trailing behind Samsung (18%) and Xiaomi (16%). But it makes 66% of the industry's profits.
So let's see the profit Apple makes on each iPhone
Cost of Production: The total cost of production for an iPhone 12 (128 GB) is just ?30,500! Following is the breakdown: Screen - 3160 Battery - 590 Cameras - 74340 Processor, Modems, and Memory 10,360 Sensors, Packaging etc. - 12,050
The iPhone 12 costed $799 (58,600) upon release in the US, giving Apple a hefty $385 (228,300) or 48% profit margin on each unit.
The But as we all know, the story in India was a lot different
Taxes: Why do the iPhones cost so much more in India?
Well, it's due to the following taxes: • 18% GST 30% Import Duty
These bring the cost per unit for an iPhone 12 from 730,500 to 41,450. Thus, to maintain its 48% profit margin, Apple increased the price from 58,600 to 79,900 in India
Make in India
The govt. announced the Production-Linked Incentives (PLI) scheme early this year, which gave manufacturers 40,000 Cr in incentives to set up plants in India, including Apple
Apple thus gave contracts to 3 companies:
1. Foxconn
2. Wistron
3. Pegatron.
Foxconn has already started manufacturing the iPhone 12 in its plant in Tamil Nadu.
If Apple can avoid the import duty by manufacturing iPhones in India, we'll probably see a drop in retail prices in the future.
0 Comments