Wistron, the Taiwanese contract manufacturer is packing its bags in India as it’s set to sell its iPhone assembly unit in Kolar, near Bengaluru, to the Tata Group. This decision comes as Apple's other contract manufacturers, Foxconn and Pegatron, expand their presence in India.
Wistron was the first among Apple's global contract manufacturers to begin assembling iPhones in India back in 2017. However, the company's non-involvement in Apple's supply chain beyond assembly and its challenges with the local work culture have led to its exit from the Indian market, the second-largest smartphone market worldwide.
Wistron faced a major setback in December 2020 when violent protests erupted at its Kolar facility over alleged unpaid wages and harsh working conditions. This incident resulted in significant damages and Apple subsequently placed Wistron on probation until corrective measures were implemented. Despite resuming operations in February 2021, Wistron struggled to find long-term profitability as a mere assembler of the final product.
According to industry insiders, Wistron's smaller size compared to global players like Foxconn and Pegatron prevented the company from negotiating higher margins with Apple. Additionally, the company lacked the necessary inventory management systems, which became particularly challenging during the pandemic when sourcing components from multiple regions.
Recognizing limited profitability in the Indian market, Wistron plans to focus on its core IT manufacturing businesses in countries such as Vietnam and Mexico. The company ceased iPhone assembly in China in 2020, and the Indian market became relatively insignificant for its operations.
The deal between Wistron and the Tata Group is currently underway, with Tata executives assuming key positions. Wistron will continue its profitable repair business in India, operating from a facility in Bengaluru.