Tata Group, India’s largest conglomerate, is close to an agreement to acquire an Apple Inc. supplier’s factory in Karnataka as soon as August. This would mark the first time a local company would move into the assembly of iPhones, according to people familiar with the matter.
The move when completed, would make Tata the first Indian iPhone maker. The company is expected to improve on the current capacity of the production of iPhones in the Wistron factory while also reportedly conducting trials to assemble upcoming iPhone 15 models in India.
A takeover of Wistron’s factory in Karnataka would end a year of negotiations. The takeover is potentially valued at more than $600 million, as per the report. The factory has more than 10,000 workers who currently work to assemble the latest iPhone 14 models.
Wistron has committed to shipping $1.8 billion worth of iPhones from the factory in FY24 so that it can win state-backed financial incentives. The company also plans to increase the plant’s workforce three times by next year. Tata will honour the commitments amid Wistron’s exit from India’s iPhone business.
Wistron started manufacturing iPhones in India around 5 years ago with iPhone SE 2. Currently, the tech giant manufactures iPhone SE, iPhone 12, iPhone 13, and iPhone 14 in India.
The factory has also exported around $500 million in iPhones from India in the three months ended June 30. Currently, Wistron and Foxconn Technology Group are the leaders in iPhone assembly.
Tata will reportedly assemble a tiny chunk of the iPhone 15 and 15 Plus for Apple in the country. Foxconn, one of Apple’s oldest and biggest contract manufacturers, will make most of the iPhone 15 series models, followed by Pegatron and Luxshare.
India, a new factory market for Apple
The need for Apple to reduce its dependence on China as a manufacturing centre has been clear for some years, but the impact of the pandemic at the world’s biggest iPhone assembly plant, Foxconn, really underlined the problem.
The iPhone brand maker started shifting production away from China after the country’s strict COVID-related restrictions disrupted the manufacturing of new iPhones and other devices in the country. It also looked to avoid a big hit to its business from tensions between Beijing and Washington with the move. The COVID-19-related disruption was estimated to have cost the company a billion dollars per week.
In March 2023, there were reports that Apple’s partner, Foxconn Technology Group planned to invest about $700 million in the Karnataka site to ramp up local production. The move was described by the state’s investment promotion division as one that would generate 100,000 jobs in the next 10 years.
In truth, Apple said last year that it was building its flagship iPhone 14 in India as the U.S. technology giant aims to shift some production away from China in an effort to diversify production away from America’s economic rival and increase customers in India.
The country is seen as Apple’s main hope when it comes to relocating production outside of China. A report last year suggested that a quarter of all iPhones could be made in the country by 2025, and a later one indicated that this could rise to half of all iPhones by 2027.
iPhone manufacturing by a domestic company may help persuade other global electronics brands to consider production in India to reduce their reliance on China.
The Tata Group, which sells everything from salt to tech services, has sought to make inroads into electronics production and e-commerce over the past few years. Both territories are relatively new for the Tata family.
It already makes the iPhone chassis (the metal backbone of the device) at its factory in Tamil Nadu. The Tatas also foster semiconductor manufacturing ambitions, said its Chairman, N Chandrasekaran.
Coming to iPhone 15, Apple is reportedly planning to launch a total of four models in the same sizes as the iPhone 14 models, including two 6.1-inch iPhones and two 6.7-inch iPhones. One of the 6.1-inch iPhones will be the standard iPhone 15, while one of the 6.7-inch models will be an iPhone 15 “Plus.”
The other 6.1 and 6.7-inch iPhones will be higher-end “Pro” models. The upcoming iPhone 15 series may enter mass production in August, on track to build around 84 million made for the second half of 2023.
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