June 23, 2024
Wistron is Selling Its India iPhone Assembly Business to Tata Group [Report]

Wistron is Selling Its India iPhone Assembly Business to Tata Group [Report]

Posted May 22, 2023 at 1:31pm by iClarified
Wistron is selling its iPhone assembly unit in Kolar, near Bengaluru, to the Tata Group, according to The Economic Times. The sale comes as Apple's other contract makers, Foxconn and Pegatron, are increasing their presence in the country.

Wistron was the first of Apple's three global contract manufacturers to start assembling iPhones in India in 2017. But its inability to get deeper into Apple's supply chain--component manufacturing and vendor-managed inventory holding—is one of the key reasons the Taiwanese contract manufacturer is exiting India, the world's second largest smartphone market.

The company also struggled to get a handle on work culture in the country, leading to a riot at its plant in December of 2021.

Executives tell the site that Wistron began contemplating an exit from India because it didn't see long-term profit potential in being just a mere assembler of the final product. Rather, the company believes its core IT manufacturing businesses in Vietnam and Mexico have better prospects.

Wistron also stopped assembling the iPhone in China after selling its Kunshan unit to Luxshare in 2020, making the India business too small to focus on.

"Wistron has not been able to make any money from the Apple business in India. It has tried to negotiate with Apple for higher margins, but being a smaller player as compared to Foxconn and Pegatron globally, it did not have the necessary leverage," said an executive.

Additionally, while Foxconn and Pegatron are involved in inventory management for Apple in India, Wistron wasn't able to get into the high-margin business.

"There need to be systems in place to gauge demand and ship to various units, which Wistron lacked. Plus, it is a much smaller player as compared to Foxconn and Pegatron," said one of the executives.

Although the sale has yet to be formally closed, Tata executives are already taking up key positions at the plant. More details in the full report linked below...

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Wistron is Selling Its India iPhone Assembly Business to Tata Group [Report]
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