Tata is a step closer to be India’s first local iPhone maker
- Tata is apparently looking to complete its purchase of an iPhone factory from Taiwanese manufacturer Wistron by the end of March, sources indicate.
- Tata is set to oversee the main manufacturing operation, with support from Wistron.
- Tata’s deal would advance India’s efforts to create local contenders to challenge China’s dominance in electronics.
In September last year, Tech Wire Asia reported that besides Vietnam, India has emerged as Apple’s top manufacturing bet in Asia outside of China, with talks that Tata Group may just be the first Indian iPhone maker. With the news resurfacing this week, sources are indicating that Tata is close to finalizing its talks with Taiwanese electronics manufacturing giant Wistron Corporation to take over a major plant in southern India.
The talks that have been going on for months, are expected to be completed by the end of March, according to a Bloomberg report quoting two sources familiar with the matter. The airline-to-software conglomerate has been in talks with the factory’s owner Wistron, discussing various potential tie ups but talks have now centered on Tata taking a majority of a joint venture, the people said.
“Tata is set to oversee the main manufacturing operation, with support from Wistron, the people said, asking not to be named because the plans aren’t public,” the report stated. For context, Apple Inc.’s iPhones are mainly assembled by Taiwanese manufacturing giants like Wistron and Foxconn Technology Group. Therefore, Tata’s deal would simply advance India’s efforts to create local contenders to challenge China’s dominance in electronics.
The 2.2 million square-foot factory by Wistron is located just over 30 miles (50 kilometers) east of Bangalore. If the acquisition goes through, Tata will take over all eight iPhone lines, as well as the plant’s 10,000 workers, including a couple thousand engineers. Wistron would continue as a service partner for iPhones in India.
“The acquisition could value Wistron’s only iPhone manufacturing operation in India at more than US$600 million if the Taiwanese company meets the requirements to receive the expected incentives for the current financial year, one of the people said,” Bloomberg stated. For context, Wistron is one of three Taiwanese iPhone manufacturers in India, along with Foxconn and Pegatron Corp.
It has sought to diversify its business beyond thin-margin iPhone manufacturing into areas such as servers, agreeing to sell its iPhone production business in China to a competitor in 2020. However, as Wistron plans to exit iPhone-making in India, its Taiwanese peers are expanding their iPhone production lines. To top it off, Apple has been seeking to reduce its dependence on China, where pandemic-related supply chain snarls and draconian restrictions have wrought havoc on device production.
On the other hand, Tata has been taking steps to increase its business with Apple. Among them is accelerating hiring in its factory in Hosur, near Bangalore, where it produces iPhone components. “That plant stands on several hundred acres of land where Tata could add iPhone manufacturing lines in the coming years,” Bloomberg noted. Tata has also announced that it will launch 100 Apple stores in the country of 1.4 billion, the first of which is set to open in Mumbai this quarter.
Tata Group’s Infiniti Retail, which runs the consumer electronics store chain Croma, will be an Apple-authorized reseller and set up stores at shopping malls, high-street and neighborhood locations, the Economic Times reported last month. Last year was also the year Apple started making its iPhone 14 in India as part of its out-of-China diversification plans. While it is certainly not the first time Apple made iPhones in India, the move marks the first time for the country when it comes to the latest smartphone lineup.
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