The Tata Group has acquired Wistron’s operations in India, paving the way for it to manufacture and assemble Apple iPhones in India for both domestic and global markets. The announcement was made by Union Minister Rajeev Chandrashekar on social media.
He said, “Within just two and a half years, Tata Group will now start making iPhones in India for domestic and global markets from India. Congratulations to the Tata team for taking over Wistron’s operations”.
“Wistron’s board approved the sale of Wistron InfoComm Manufacturing (India) Private Ltd. to Tata for $125 million (Rs 1,040 cr)”, a Bloomberg source said, quoting a statement by the Taiwanese electronics manufacturer. The unit operates an iPhone assembly plant near Bengaluru, a person familiar with the matter said, it added.
Who are the Wistron Group?
Wistron Corporation, together with its subsidiaries and affiliated companies, is an information technology leader. Group members provide a variety of industrial products and services in communications, components, and software solutions.
Wistron is one of three Taiwanese iPhone manufacturers in India, along with Foxconn and Pegatron. Wistron entered India in 2008 with a repair facility. This facility was used to service PCs, laptops, servers and other devices it manufactured. In 2017, the Taiwan-based company started making iPhones for Apple Inc. Currently the company makes iPhone 14, iPhone 13, iPhone 12 and iPhone SE.
How did Wistron Group exit from Apple’s Business in India, made way for Tata Group?
Wistron is one of three Taiwanese iPhone manufacturers in India, along with Foxconn and Pegatron. 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.
Yet even as Wistron plans to exit iPhone-making in India, its Taiwanese peers are expanding their iPhone production lines. Apple, the world’s most profitable smartphone maker, is seeking to reduce its dependence on China, where pandemic-related supply chain snarls and draconian restrictions have wrought havoc on device production.
CREDIT : NY TIMES
The primary reason for Wistron to leave Apple’s Indian empire is the inability to penetrate through the supply chain made by Apple. It includes component manufacturing and vendor-managed inventory holding.
Wistron also faced a lot of issues understanding the local work culture. In December 2020, soon after operations started at the Kolar Unit, workers started to protest as they were pile of unpaid wages and rigorous hours of work. The company later on had to pay Rs 430 crores in damages. Apple also held Wistron on probation and halted the production until collective measures were adopted. Later on, in 2021 the production was restarted.
A report revealed by the Economic Times (ET) confirmed more than 400 senior production staff have been protesting against the management. The report further added that employees and industry executives have said Wistron wanted to leave the business back in 2021 itself because it “didn’t see long-term profitability in being a mere assembler of the final product”.
Tata was always eyeing the spot. Ever since the breakout in 2020-21; India’s oldest and the most trusted company was optimistic about joining Apple’s Indian empire.
Tata Group’s ideal future once production starts
The deal follows the two firms negotiating terms for over a year. Tata, which is set to become the first Indian firm to assemble iPhones, declined to comment.