Tata Group steps into iPhone manufacturing with Wistron acquisition
The acquisition is driven by the Production-Linked Incentive (PLI) scheme, which offers financial incentives to smartphone manufacturing in India
The Tata Group, the multifaceted Indian conglomerate, is set to become India's first homegrown iPhone manufacturer.
The announcement comes on the heels of Tata's acquisition of Wistron's iPhone assembly plant in southern India.
While Apple has been manufacturing iPhones in India since 2017, it initially focused on producing older generation handsets through partners like Foxconn, Wistron and Pegatron, with a production lag of six to nine months compared to its Chinese facilities.
However, a recent JPMorgan report suggests that Apple is planning to move 5 per cent of its global iPhone 14 production to India by late 2023 and expand its capacity to manufacture one out of every four iPhones in India by 2025.
The Tata Group's acquisition of Wistron's iPhone assembly plant marks a significant milestone in India's manufacturing sector. The deal, valued at $125 million, includes Wistron InfoComm Manufacturing (India) Pvt Ltd, a vital component of Apple's production in India.
With this acquisition, the Tata Group becomes the first domestic iPhone maker in India's history.
This strategic move is a testament to the Tata Group's commitment to innovation and also a bold step towards strengthening its ties with Apple, the world's largest technology company.
The acquisition is driven by India's production-linked incentive (PLI) programme, which offers financial incentives to businesses setting up smartphone production facilities in the country — and attracting major tech companies like Apple.
The Tata Group isn't limiting its involvement to manufacturing alone. The conglomerate has also announced plans to launch 100 Apple-authorised stores across India, making Apple's products more accessible to the masses.
For Apple, this collaboration offers a more robust and reliable supply chain, reducing dependence on overseas production facilities and diversifying risks. It serves as a safeguard against the turbulence of global logistics.
However, Wistron's decision to exit the iPhone business is not without its challenges.
The company has faced difficulties since the 2020 violence outbreak over wage and pay gaps at its manufacturing facility. Wistron's inability to secure a deeper position in the tech giant's supply chain contributed to its exit. Apple had suspended new contracts with Wistron, pending resolution of the issues affecting the company's business relationship with the tech giant.
By bringing iPhone manufacturing under the Tata umbrella, the Indian conglomerate hopes to gain prominence in the global supply chain through its collaboration with Apple too.
Production is expected to commence within the next two-and-a-half years, rolling out devices for domestic and global markets.