Apple supplier Wistron has reportedly shut down iPhone production in India, says a report by Economic Times.
Profitability
Reportedly Wistron was struggling to make profits in the region under Apple’s terms.
The latter is currently holding trials for assembling upcoming iPhone 15 models in India.
The manufacturer was unable to turn around profits from its Apple India business.
Wistron, being a small player compared to Foxconn and Pentagon, encountered difficulties in achieving profitability.
It had tried to negotiate with Apple for higher margins, but being a smaller player compared to Foxconn and Pegatron globally, it did not have the necessary leverage.
Major Apple manufacturing hub
In India till now Apple iPhones are manufactured by three major Apple suppliers – Foxconn, Pegatron and Wistron.
The country accounted for seven percent of Apple’s iPhone production in 2022.
Wistron entered the Indian market in 2008, starting by setting up a repair facility for various devices it manufactured, including PCs, laptops, and servers.
It then expanded its operations in 2017 to begin manufacturing iPhones for Apple.
Key reasons behind exit
But its inability to get deeper into Apple’s supply chain–component manufacturing and vendor-managed inventory holding—is one of the key reasons behind it exiting India, the world’s second largest smartphone market.
Wistron’s exit comes as the other contract makers double down on India.
A TrendForce report earlier this month said that Apple may manufacture iPhone 15 and iPhone 15 Plus models in India.
Tata enters the game
It stated that the handsets will be assembled by Tata Group.
The report further added that Tata’s entry into the iPhone assembly business translates to Wistron’s exit from the country
Tata Group has already purchased Wistron’s iPhone assembly unit in Kolar, near Bengaluru.
An executive was cited saying that Wistron lacked effective systems to gauge demand and ship products to various units.
Labour management issues
It also faced management challenges and reportedly struggled to retain workers at its facility in Kolar.
Differences in work culture between China and India also contributed to the challenges faced by the company.
Violence had broken out at the newly opened Kolar unit in December 2020 as workers protested against allegedly unpaid wages and arduous hours.
This cost the company about Rs 430 crore in damages.
Apple put the manufacturer on probation, halting the unit until corrective measures were taken.
It resumed work in February 2021.
Foxconn
Meanwhile, fellow Apple supplier Foxconn has bought a huge tract of land on the outskirts of Bengaluru.
The company has purchased a 1.2 million-square-metre (13 million-square-foot) land in Devanahalli, near the Bengaluru airport.
