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The iPhone Will Be Made In India... But Why?

2019-01-03
this episode has been sponsored by LastPass all right hot news story from CNBC see any others like the verge right there oh yeah well covered in a couple of places Foxconn to begin assembling top end Apple iPhones in India in 2019 this is significant well and the reason being is because they want to avoid high tariffs imported smartphones also offering cheap smartphone parts when you import it it's a little bit more expensive right but if you actually have it in-house you know all the parts there you can just assemble it and sell it for cheaper right so India has a unique kind of method to encouraging tech companies to bring a portion of their manufacturing process to India to employ domestic workers and as part of that incentive they will eliminate certain tariffs associated with bringing complete ready to sell smartphones into the country so this is important specifically because Apple and iPhone sales have kind of stagnated in India as a consequence not just of the high price like it is around the world but an even higher price as a consequence of the tariffs of the tariffs that are applied to that already high price so an iPhone in India it's like almost double or it's like 2,000 bucks yeah starting price when adjusted for the local currency and that's that's a very expensive smartphone for any part of the world and especially expensive for India where the average smartphone purchases around one hundred and fifty bucks and they have a lot of options as well there's a lot of major players who have taken India very seriously and are delivering great value at a lower price than what Apple has been able to do so as I understand it Apple has been manufacturing some phones in India to get around that tariff issue their manufacturing I believe the iPhone 6 they started with the iPhone se S II the six and then now they're reported to work on the ten the iPhone 10 will now be assembled they're making that the most expensive most premium iPhone ever assembled in India so they'll be bringing the parts in but it will be Indian workers assembling the iPhone what this will mean is a cheaper iPhone at the retailer for the average Indian smartphone buyer I was looking at some of the figures on iPhone sales in India and previously they had shown some some pretty substantial growth from originally entering the market but recently it looks like it's leveled off slow down in terms of adoption we have a huge audience here in the channel huge Indian audience and I can kind of track sort of which phones are hot and popular in that market by looking at the analytics on certain videos at the polka phone remember the polka phone how hot that very affordable affordable inside of this marketplace is where Apple is starting to show some of its cracks let's say yeah well there's a huge ecosystem for Android and iOS you know what I mean and once you're invested in it the chances of you switching are very very small yeah you get comfortable sure Apple has no problem in the immediate future they're selling boatloads of phones they're making boatloads of cash that's fine but for a company of their scale they can't just look next year they can't look five years ten years they gotta have 50 hundred years down the road right and if they're doing that then they should also be aware and effectively it looks like they're aware of how important those Asian markets are without that tariff associated you mean the price should drop 30 40 % something in this territory it should become attainable for at least more of the population I don't know how much more that said it's not like the other manufacturers are stopping in the meantime as competition heats up with the xiaomi z' and huawei's and oneplus it's a smart clientele it's a very tech-savvy audience in India they are aware of things like specifications camera sensors they're a very educated customer in the smartphone department at least all the people that I met I don't think it's going to have a substantial impact and I don't think the future is bright for Apple in India I don't think they currently have a product that makes a lot of sense for India different market different appetite and most of the action exists in that what would be considered mid-range price point here somewhere around three four hundred dollars US or lower that's what people are excited about and Apple has no product in that space and the product that should have been in that space yeah I phone 10 R came in way higher than that price wise now people make the argument well it's because of the hardware the processor and so on is the same as the flagship that's fine it doesn't really matter though I've been saying this about Apple are thinking this about Apple for a long time they've always prioritized the Western market fine great great for North America and Western Europe but by not having a more approachable product price-wise in the rest of the world they've let other people get a massive head start other companies that is and who and they've kind of priced themselves out of the game globally globally yeah especially in those places where people are adopting you know their initial platform the place where they're going to to be now for a while there are people today jack included locked into the iOS ecosystem from that original moment but they're still riding that wave of that early innovation and of having the best product bar none at that point in time and by the time you get an iPhone well you might get an iPad as well you're in might get a MacBook it's expensive in my opinion if Apple wants to make a big play in India specifically which I think they should by the way I think it's a very important market it's now our second-biggest market on a channel as far as viewers are concerned and fastest-growing people in India love smartphones I met them in real life they're incredibly passionate if Apple wants a piece of that and they should they need to come in with a $500 iPhone I don't care if it has to be trimmed down I don't care if it jeopardizes their premium flagship enterprise I don't care about that all right if I'm in there finding the boardroom and I understand this is more complicated than sounds because of course Apple wants to be perceived as a luxury brand as an aspirational bred as a luxury brand they want all that yeah but I don't care anymore smartphones are tools they're utilities they are part of the modern toolkit accessibility has to be there if you want your brand to be relevant and this is just a matter of time like I said earlier if you zoom out far enough if you expand your scope if you put it across 15 years or so on you're gonna need these new users to adopt your ecosystem otherwise everyone else gonna die off me and you gray hair dead and that initial momentum that happened from Steve Jobs and the original iPhone all of its gonna fall up yeah that you just can't ride that momentum forever mm-hmm you know and it's kind of cliche everyone constantly talks about it but there was a huge head start their product was so much better than any other alternative for such a stretch of time that they really could rest on that mm-hmm but like let's not let's not make any excuses here other products have caught up and the Western mark is just one market you know and it's a slow it's a market that's slowing substantially there we already talked in the past about smartphone fatigue and how people are pretty happy with the smartphones they've had or that are currently in their pocket they're upgrading them less frequently Apple decided to stop reporting their sales figures presumably because they have some degree of insight into the fact that fewer people are prepared to upgrade to their premium models yes it's Apple yes it's a big high-profile brand so these types of reports are going to emerge but the India this India thing is for real otherwise Apple wouldn't have done what they're doing if they weren't interested or concerned about that market at all they wouldn't take them up on this offer to bring the portion of the manufacturing there they care they're tweaking their strategy I think they'll tweak it more in the near future and eventually they're gonna get to that five hundred dollar iPhone that's what's gonna have to happen this episode is sponsored by LastPass LastPass who leads to trouble associated with remembering passwords you have so many passwords for all the different websites and services and so you get LastPass it's like autopilot for your passwords and it removes the obstacles by having a master password that unlocks all the others and then particular password is far more secure than the ones that you're likely to set up for those various services you'll never have to write down or remember a wide variety of passwords but they're all locked inside of your LastPass account if you're using the mobile app there's three new features unlimited password storage free cross device sync and password breach alert 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