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Wistron, a key supplier for Apple, has made the decision to sell its iPhone assembly factory in India, citing Apple’s terms as a hindrance to profitability in the region. The move comes after reports on May 2 indicated Wistron’s gradual scaling down of operations in India and its intention to withdraw a significant portion of its presence within the next year. Now confirmed by company executives, this decision reflects Wistron’s focus on its core IT manufacturing operations in countries like Vietnam and Mexico.
The lack of long-term profitability as an assembly provider for the iPhone has driven Wistron to consider an exit strategy. While the company has been involved in assembling iPhones such as the iPhone SE in India, it faced challenges in achieving profitability.
Unlike larger suppliers like Foxconn and Pegatron, which handle inventory management for Apple in the country, Wistron struggled to establish itself in this crucial aspect of the business.
“Wistron has not been able to make any money from the Apple business in India,” revealed an executive. “It has 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.”
In addition to the operational challenges, Wistron also faced issues in retaining workers at its facility in Kolar, India. Some employees pointed out significant management problems, stating that the company failed to comprehend the differences between the working styles of China and India.
“The mindset of Indian laborers is different, but they don’t pay any heed, leading to a high rate of attrition,” expressed one employee.
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Currently, Wistron is in the process of selling its iPhone assembly facility in Kolar, near Bengaluru, to the Tata Group. As part of this transition, the Tata Group is conducting trials for assembling upcoming iPhone 15 models in India. Wistron initially entered the Indian market in 2008 with a repair facility catering to various devices it manufactured, such as PCs, laptops, and servers. In 2017, the company expanded its operations and began manufacturing iPhones for Apple.
With this strategic shift, Wistron aims to refocus its efforts on its core IT manufacturing operations, leveraging its presence in countries like Vietnam and Mexico. The decision to exit the iPhone assembly business in India is a clear indication of the challenges faced by smaller players in negotiating terms and achieving profitability in the highly competitive world of Apple’s supply chain.