The Times of India reports that Indian software giant Infosys in on track to set up a 140 thousand square feet office in Bangalore, which would be solely dedicated to Apple’s work.
The office would be ready by the end of this year, with a capacity to house more than 1,400 employees.
From the report:
Apple outsources application development and maintenance work to the extent of Rs 490 crore to Indian IT services providers. It is said to account for $50 million (Rs 275 crore) of Infosys’ annual revenue of $7 billion.
Assuming that the new space that Infosys is taking for Apple will house a new set of employees , it would mean that Apple would be giving an additional business of at least $65 million (Rs 357 crore) every year to Infosys, considering that each Infosys employee accounts for an average annual revenue of $47,000. Infosys has about 1.5 lakh employees.
The Indian newspaper notes that Infosys contributed in the development of iCloud, apps used in Apple’s retail store and the design of certain iOS frameworks.
This piece of news follows a report from February this year, which said that Apple’s CIO Neil O’Connor had visited Bangalore to meet with officials from Infosys and Wipro, another Indian software company regarding software outsourcing projects.
Apple had famously withdrawn from a huge project to transfer its tech support to India back in 2006 over quality concerns, but it seems that when it comes to software, the Indian IT industry is able to match the company’s standards and deliver up to Apple’s expectations.
Earlier this year, Apple had also put up a dedicated web page highlighting the 500,000+ jobs it had created in the US. It’s interesting that the company is choosing to outsource (a part) of the development of certain products to Indian software firms. Although some folks might jump in here to criticize Apple’s “hypocritical” stance, the fact remains that a lot of software work can still be done at much cheaper costs in India than the US.
Software outsourcing, just like the Chinese supply chain, helps keep Apple’s costs down (and consequently product prices down and Apple’s margins high).