Wistron quits making iPhones in India to focus on Vietnam
Making iPhones in India doesn’t seem to have made Wistron rich as the Apple partner quits manufacturing the devices, selling its India factories to Tata Group. Wistron says that Apple’s tough focus on price meant it couldn’t make enough money from the arrangement in which it made iPhones in India. Wistron was the first Apple contract manufacturer to start assembling iPhones in India in 2017, though Foxconn and Pegatron soon joined the rush.
Stuck on one level
A report on Economic Times says Wistron was unable to get more deeply involved in Apple’s supply chain and widen its business.
“Wistron has not been able to make any money from the Apple business in India. It has tried to negotiate with Apple for higher margins, but being a smaller player as compared to Foxconn and Pegatron globally, it did not have the necessary leverage,” ET said.
Apple’s supply chain has three levels:
- Level 1: Component suppliers.
- Level 2: Inventory companies that sort, store and ship components to final assemblers.
- Level 3: Final assemblers such as Pegatron or Foxconn. The third level contractors have also built a business in inventory warehousing, which is a highly profitable section of Apple’s business.
Different folks, different strokes
There was also the matter of poor labour relations – there was even violence on the factory floor in India as workers protested at working conditions. Protests continue at the factory, the report states, citing “a lot of management issues.”
There are cultural differences in play as Indian workers value a good work/life balance, and worker retention is low.
The deal with Tata is still being finalized, but a changing of the guard has already begun. Wistron will now focus on building computer manufacturing facilities in Vietnam while it continues to run repair shops in India. Apple is also developing its supply chain in Vietnam, of course.
Did Wistron withdraw too early?
Perhaps.
Apple’s iPhone sales are surging in India with a second report explaining the extent of this. Consumers in India who already use iPhones stick with them while Apple has seen a 28% growth in iPhone sales there. Lower cost devices still account for the vast majority of the market, but this is changing slowly.
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