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Trying to interpret this. First of all $300M isn't a lot of money for this sort of operation. I guess it barely buys a good line of equipment, installed with a

Trying to interpret this. First of all $300M isn't a lot of money for this sort of operation. I guess it barely buys a good line of equipment, installed with an operable workforce, if that. Secondly, the amount of manual labour in iPhone assembly has to be pretty minimal with respect to margins. Can anyone enlighten us to the management situation? I guess perhaps the true story behind the 'asserted' transition to an additional base in India includes other factors like: freeing Foxconn capital from China (currently their largest production base, with rising costs, a slowing market and perennial foreign exchange hassles), gaining additional internal production operations experience within a foreign non-'Chinese' (ie. Taiwan/China) environment, and cross-jurisdictional legal/tax/tariff/exchange rate hedging. (The US-China trade war has to have scared the pants off anyone in a consumer electronics this heavily.)

ucaetano 8y ago
"The company needs to meet a 30 percent local sourcing rule to be able to open its own stores in the country." It is just the result of protectionism.
- CPLX 8y ago
  It’s not “just” that, it’s actially the desired result of the protectionist policy, which appears to have been effective.
  - bottled_poe 8y ago
    How dare a country enforce policies that benefit the domestic economy.
    - briandear 8y ago
      Assuming a benefit is a fallacy. It’s a benefit only which analyzed through a superficial lens.
      - bottled_poe 8y ago
        That’s a very abstract comment. Such policies seem completely measurable to me. Can you elaborate?
  - acchow 8y ago
    Why don't other large, developing countries adopt similar policies? What are the downsides?
    - iguy 8y ago
      Many do. The downside is that a heavy import tax makes whatever is being imported more expensive for local consumers to buy. In some sense this makes them poorer. The goal is usually to encourage local firms to grow and compete, and sometimes that happens (e.g. Hyundai). But sometimes the local firms become complacent in their walled garden (e.g. Hindustan Motors).
    - whenchamenia 8y ago
      You get ignored by lots of international companies that dont want to play by your silly and often unprofitable rules. Leading to a loss of choice and quality in goods and services, and a general depression of the economy over time. The softer hand moves more grain or something.
    - caymanjim 8y ago
      Revenge in the form of trade wars that screw everyone in the end. Exactly what the US is doing right now with all its tariffs, which are not helping US manufacturers (their stated intent) and are hurting US consumers (due to revenge tariffs).
    - gnopgnip 8y ago
      Many others do, but usually on a more limited basis to protect certain industries. Brazil does for virtually all electronics.
    - rodgerd 8y ago
      Strong government management of the economy was the foundation for the success of Japan, South Korea, and Singapore in the mid 20th century (as an example). So absolutely people do it.
NTDF9 8y ago
It's a logistics/risk balancing/new demand move. 1. Logistics: Cheaper to ship to rich Middle east and maybe even Europe 2. Risk balancing: With uncertainty at political levels about tariffs and trade rules, it makes sense to distribute production to multiple places in the world. 3. New demand: Lower cost of production == lower prices in India. Apple has negligible penetration in the largest fastest growing market. This move is a bet to try to beat android competition in price and raise global demand for IPhones. Honestly, this move is a no-brainer. The benefits are endless.
- Ayesh 8y ago
  I think Apple is pretty late at this point. Xiaomi and Oppo have figured out the distribution, localization, and a sizeable user base already there, and a decent smart phone now costs $150-200. They are quite good phones and from what I understand, price is the biggest driver for sales.
  - plibither8 8y ago
    Apple will mostly rely on its loyal customer base (at least in India) who will support and buy only Apple products, which of course primarily means the iPhone. Plus, if the prices do in fact drop once they start manufacturing in India, I'm sure there will be many more XYZ-Chinese-company to Apple conversions.
  - itissid 8y ago
    But apple is a luxury brand. You can't say that with Xiaomi or Oppo. With luxury brand the price is not a bug but a feature for the people that swear by them. And Rich people don't even care about the money. the 50-100 million rich people in india are least bothered about the price tag as long as it signifies luxury and status.
    - jpatokal 8y ago
      Xiaomi is a luxury brand in the Chinese market. And rich by Indian standards doesn't mean they can afford to spend over $1000 on an iPhone: in India, a top 1% household earns only about $1000/month.
deleted 8y ago
[deleted]

ucaetano 8y ago

"The company needs to meet a 30 percent local sourcing rule to be able to open its own stores in the country." It is just the result of protectionism.

CPLX 8y ago
It’s not “just” that, it’s actially the desired result of the protectionist policy, which appears to have been effective.
- bottled_poe 8y ago
  How dare a country enforce policies that benefit the domestic economy.
  - briandear 8y ago
    Assuming a benefit is a fallacy. It’s a benefit only which analyzed through a superficial lens.
    - bottled_poe 8y ago
      That’s a very abstract comment. Such policies seem completely measurable to me. Can you elaborate?
- acchow 8y ago
  Why don't other large, developing countries adopt similar policies? What are the downsides?
  - iguy 8y ago
    Many do. The downside is that a heavy import tax makes whatever is being imported more expensive for local consumers to buy. In some sense this makes them poorer. The goal is usually to encourage local firms to grow and compete, and sometimes that happens (e.g. Hyundai). But sometimes the local firms become complacent in their walled garden (e.g. Hindustan Motors).
  - whenchamenia 8y ago
    You get ignored by lots of international companies that dont want to play by your silly and often unprofitable rules. Leading to a loss of choice and quality in goods and services, and a general depression of the economy over time. The softer hand moves more grain or something.
  - caymanjim 8y ago
    Revenge in the form of trade wars that screw everyone in the end. Exactly what the US is doing right now with all its tariffs, which are not helping US manufacturers (their stated intent) and are hurting US consumers (due to revenge tariffs).
  - gnopgnip 8y ago
    Many others do, but usually on a more limited basis to protect certain industries. Brazil does for virtually all electronics.
  - rodgerd 8y ago
    Strong government management of the economy was the foundation for the success of Japan, South Korea, and Singapore in the mid 20th century (as an example). So absolutely people do it.

NTDF9 8y ago

It's a logistics/risk balancing/new demand move. 1. Logistics: Cheaper to ship to rich Middle east and maybe even Europe 2. Risk balancing: With uncertainty at political levels about tariffs and trade rules, it makes sense to distribute production to multiple places in the world. 3. New demand: Lower cost of production == lower prices in India. Apple has negligible penetration in the largest fastest growing market. This move is a bet to try to beat android competition in price and raise global demand for IPhones. Honestly, this move is a no-brainer. The benefits are endless.

Ayesh 8y ago
I think Apple is pretty late at this point. Xiaomi and Oppo have figured out the distribution, localization, and a sizeable user base already there, and a decent smart phone now costs $150-200. They are quite good phones and from what I understand, price is the biggest driver for sales.
- plibither8 8y ago
  Apple will mostly rely on its loyal customer base (at least in India) who will support and buy only Apple products, which of course primarily means the iPhone. Plus, if the prices do in fact drop once they start manufacturing in India, I'm sure there will be many more XYZ-Chinese-company to Apple conversions.
- itissid 8y ago
  But apple is a luxury brand. You can't say that with Xiaomi or Oppo. With luxury brand the price is not a bug but a feature for the people that swear by them. And Rich people don't even care about the money. the 50-100 million rich people in india are least bothered about the price tag as long as it signifies luxury and status.
  - jpatokal 8y ago
    Xiaomi is a luxury brand in the Chinese market. And rich by Indian standards doesn't mean they can afford to spend over $1000 on an iPhone: in India, a top 1% household earns only about $1000/month.

deleted 8y ago

[deleted]