Apple has begun trial production of iPhone 6s Plus — one of its highest-selling models in India — at the Bengaluru facility of its contract manufacturer Wistron, which may lead to a price correction, two senior industry executives said.

Wistron has set up a new assembly line for iPhone 6s Plus production, and commercial production is expected to start in next couple of weeks, they said.

As per the executives, locally produced iPhone 6s Plus can bring down prices by 5-7%, which will make its price competitive to China’s OnePlus smartphones and some premium models of Samsung, which were insulated from price hikes due to the rise in customs duty since they are all locally produced in the country.

“However, the price correction may not be reflected immediately since Wistron will not be able to fully meet the entire requirement of iPhone 6s Plus in India and imports from China will continue,” one of them said. “Eventually, as the local capacity gains scale the prices will get corrected.”

Emails sent to Apple India and Wistron did not elicit any response as of press time Thursday.

Hong Kong-based Counterpoint estimates the iPhone 6 series contributes almost one-third of total sales of iPhones in India in 2017 as compared to less than 15% generated from iPhone SE, the only Apple smartphone model to be locally assembled in the Wistron plant till now.

Local assembly of iPhone SE since May last year helped the model to be insulated from a 6-7% price hike that Apple had to undertake as the basic custom duty on smartphones was increased to 15% from 10% in December and again to 20% in February.

Industry executives said Apple has also started discussion with its component vendors and contract manufacturers like Flex, Foxconn and Wistron to expand local sourcing, including components.

Earlier this month, the government imposed a 10% custom duty on components like printed circuit boards populated with memory and chips, camera modules and connectors.
Meanwhile, Apple has expanded local sourcing initiative to two more partners in India, which now includes chargers, adapters and packaging boxes. As a result, there are now five sourcing plants in India as compared to one in early 2017, as per Apple’s global supplier list available on its website.
Apart from Wistron, Apple has added Finland-based Salcomp’s facility in Tamil Nadu and China-based Shenzhen YUTO Packaging Technology plant in Bengaluru for global sourcing.
An industry executives said Salcomp is into manufacturing of chargers and adapters for iPhones, while Shenzhen YUTO Packaging manufactures packaging products.

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