Foxconn Technology is in talks to manufacture Apple's (NASDAQ: AAPL) iPhone in India, government officials said, in a move that could lower prices in the world's number-three smartphone market where the U.S. firm trails Samsung Electronics and local players.
India could help Foxconn mitigate accelerating wage inflation in China, where it makes the majority of iPhones, and base production sites closer to markets where its key clients want to grow.
Lower production costs could also help Foxconn keep hold of Apple orders amid intensifying competition with nimble manufacturing rivals such as Quanta Computer Inc.
Foxconn has said it is aiming to develop 10-12 facilities in India, including factories and data centers, by 2020, but had given no detail.
The Taiwan-based tech giant, the world's largest contract maker of electronic products, declined to comment on detailed plans on Thursday, citing commercial sensitivity.
Desai said Foxconn had yet to make any firm commitment, but he said the group was looking to manufacture iPhones, iPads and iPods, both for domestic as well as global sales.
Apple representatives in India did not respond to a request for comment on Thursday.
Apple's iPhone 6 with 16 GB sells for around 44,000 rupees ($687.82 U.S.) in India, versus Samsung's Galaxy S6 with 32 GB which sells for around 40,000 rupees ($625.29 U.S).
It has 10% market share in India, trailing Samsung and local manufacturers such as Micromax, which dominate the market, according to Counterpoint Research Market Monitor.
Apple shares gained 90 cents, or 0.7%, in early Thursday trading to $129.78 U.S., within a 52-week trading range of $89.65 U.S. to $134.54 U.S.
