Apple starts assembling iPhones in India in play for the world’s fastest growing smartphone market

Apple has taken an important step in its longstanding goal of penetrating the world’s second largest smartphone market. The Wall Street Journal first reported that the company has completed its first trial run assembly of the iPhone SE in India – a key step in gaining a foothold for a market that has thus far proven elusive for the smartphone maker.

The company has since confirmed the move with TechCrunch, writing in a statement, “We are beginning initial production of a small number of iPhone SE in Bengaluru. iPhone SE is the most popular and powerful phone with a four-inch display in the world and we’ll begin shipping to domestic customers this month.”

Chief competitor Samsung has dominated the ranks in recent years, with around a quarter of the market by various analyst estimates. The rest of the top five is monopolized by Chinese brands like Xiaomi, Oppo, Lenovo and Vivo. Apple has managed to see some growth in the country, but it’s been a tough sell in a market where the average handset runs $150, according to numbers from IDC.

The four-inch SE is Apple’s least expensive model, running $399 in the States. Some retailers in the country have managed to undercut the cost, lower the entry level price of the handset by around $80 – but even at that price, it’s still substantially more expensive than most. In spite of its relatively low pricing, the SE doesn’t appear to have made quite the splash Apple was initially anticipating in the country.

Apple has long been working to move production to the country, hoping, in part, to retake some of the market it has lost in China in recent years, as domestic handset sales have grown. Locals are hoping that such a move could reduce the retail cost of the SE even further, by as much as $100. But while $220 is certainly a lot more palatable, that still marks a substantial premium over the average handset price.

The fact that Apple looks to keep pricing relatively consistent across markets could also serve as something of a hurdle. Though perhaps its aggressive push in recent years, along with an embrace of lower cost devices could stem the tide. After all, the India smartphone market is big and only getting bigger.

It’s the world’s fastest growing market, having recently surpassed the U.S. to claim the number. The Indian market is expected to generate somewhere in the neighborhood of one billion smartphone sales over the next half-decade.

In spite of its rapid growth, however, little actual manufacturing is occurring in India. Recent numbers have domestic manufacturing and assembly at around six-percent in the country. The addition of a large global name like Apple has been regarded by a big win by the government as it brings more jobs to the country, through initiatives like the Prime Minister-sponsored Make in India program.