It’s not every day that the largest Indian conglomerate joins forces with the supplier of an International Tech giant to assemble one of the best-selling smartphones locally. Tata Group is super close to landing the Wistron Corp. deal and being the first local company to make iPhones in India. A Bloomberg report suggests that the agreement could be sealed as early as August 2023. Amazing, right?
Let’s learn more about all the involved parties in this agreement and their role in it.
They are a leading Taiwanese Original Design Manufacturer (ODM) located in the southern state of Karnataka. The company designs and manufactures products for other companies to sell under their brand name. They entered India with a repair facility that was used to service PCs, laptops, servers and other devices. Apple first tied up with Wistron in 2017 to assemble the first iPhone model in India. The tech giant has since expanded manufacturing with its other two global contract manufacturers Foxconn and Pegatron. With a workforce of 10,000+ employees, the company currently assembles the iPhone 14, iPhone 13, iPhone 12 and the iPhone SE.
Known to be the largest and most renowned Indian conglomerate having a legacy spanning over 155 years, the trust associated with the Tata Group is unparalleled. They have established themselves as a pioneer across a range of diverse sectors such as communications and information technology, engineering, materials, services, energy, consumer products, and chemicals. The Group has been looking to enter the electronics production and e-commerce industry since some time now. Since they are already into making iPhone chassis and are looking into chipmaking as well, the Tata-Wistron deal comes to them as a winner.
Let’s Talk Numbers
After a year of negotiations, the deal is potentially valued at more than $600 million (i.e. over ₹. 4000 crores). As per a report by Bloomberg, Wistron has agreed to ship iPhones worth around $1.8 billion from the factory to Apple in the current fiscal year. They have also planned to triple their workforce by next year. And with Wistron exiting Apple India’s business, Tata Group is on track to honour these commitments. The deal will result in reduced import costs and quicker delivery of products.
Why Wistron Left Apple?
Upon facing difficulties in negotiating higher profit margins with Apple and encountering challenges in inventory management as compared to larger suppliers who are handling it more effectively, Wistron chose to exit Apple India’s business. They prefer focusing on their core IT manufacturing operations in Vietnam and Mexico. Management issues, inability to retain workers due to cultural differences, and lack of effective systems to handle the demand for products added to Wistron’s struggles. This compelled the restructuring of the company resulting in selling its iPhone assembly facility in Kolar to the Tata Group. They are reportedly conducting trials to assemble the upcoming iPhone 15 models in India.
What Does This Deal Say For India?
This landmark deal is an opportunity to position India as not just an iPhone manufacturer but as a noteworthy innovation hub on the International technology map. With Tata Group’s deep knowledge of the Indian market and Wistron’s technological prowess, this powerhouse collaboration will open doors for many more to come. Adding to Prime Minister Narendra Modi’s ‘Make In India’ movement, this partnership will create abundant job opportunities and great scope for technological advancements. Ever since our PM set up government programs with lucrative financial incentives to expand production and employment, India has made tremendous progress in domestic manufacturing.
Giving Us The Competitive Edge
A milestone in its own right, this deal really places us in the global eye and positions us as a strong and sturdy competitor in the tech ecosystem. Apple accepts this move with open arms as it distributes its reliance on China for manufacturing. Making in India further challenges China’s ‘factory of the world’ image. Moreover, this partnership with Apple gives out the message that India has the best technological infrastructure and is fully capable of handling production for various global electronics brands. The world’s largest mobile factory was opened by Samsung in Noida. Chinese brands like Xiaomi and Vivo also get the assembling of their devices done in the country, which are exported as well. As per a report by India Cellular and Electronics Association (ICEA), there has been a significant growth of 128% in the export of smartphones in India in April and May this year.
This is a moment of utmost pride for our country and we cannot wait to get our hands on the Indian-made iPhones!