Tata Group set to become first Indian iPhone maker
Tata Group has been in talks to acquire Taiwanese electronics giant Wistron's iPhone assembly plant for a while. Now, according to Bloomberg, the Indian conglomerate is close to sealing the deal, with the two parties expected to reach an agreement as soon as August. The acquisition would be the first step toward Tata's ambitions to become the first Indian company to manufacture iPhones.
Why does this story matter?
Tata's acquisition of Wistron is not just a win for the conglomerate but for the country as well. It is a major boost for India's aspirations to become an electronics manufacturing hub. An Indian company manufacturing iPhones could help the Indian government attract other major companies to the country. This is also an indication of India's growing importance in Apple's ecosystem.
Tata to honor Wistron's commitment after acquisition
Wistron's iPhone factory is located on the outskirts of Bengaluru, Karnataka. The factory is valued at over $600 million. The plant employs over 10,000 workers, and Tata and Wistron have been involved in negotiations for about a year. After the acquisition, Tata will honor Wistron's commitment to ship at least $1.8 billion worth of iPhones in this fiscal year.
Wistron struggled to achieve profitability
Wistron has had a tough time in India. The company has struggled to achieve profitability under Apple's terms. Its attempts at negotiating higher margins failed due to its smaller size compared to Foxconn and Pegatron. It also faced inventory management and local employment norms-related issues. Also, the high attrition rate was a constant problem at the factory.
iPhone manufacturing golden opportunity for Tata
For Tata Group, manufacturing iPhones is a golden opportunity. There aren't many consumer products that Tata does not make, but smartphones are one of them. To make its entry into smartphone assembly through iPhones is an achievement in itself. It should be remembered that Tata already makes iPhone chassis. Meanwhile, there are speculations that Tata may acquire Pegatron's facility. too.
Tata aims to improve factory
Wistron started making iPhones in India in 2017. In the three months that ended on June 30, Wistron exported around $500 million worth of iPhones from India. With Tata at the helm, the number is expected to go up as the company aims to improve the facility. According to CNBC-TV18, Tata is currently conducting due diligence at the factory.
