Wistron not to make high-end Apple iPhones in India?

All eyes are on Apple how the tech giant is planning to turn around its India story and a lot depends on how it will strategise local assembly and manufacturing of iPhones in a country where over 450 million people now use smartphones. Some media reports claim Apple's Taiwanese industrial major Wistron Technologies is set to make new, high-end iPhones in India, after getting the government's nod for its next-phase of manufacturing in the country.

Industry insiders, however, deny the scenario where Wistron, which is an original equipment manufacturer (OEM) and makes components and products for various other brands apart from Apple, is going to manufacture high-end iPhones in the near future. Wistron, which announced last year plans to invest Rs 3,000 crore in the Narasupra industrial sector in Karnataka's Kolar district, started Apple operations with assembling low-end iPhone SE and later 6S.

Wistron India head Gururaj A said the company would set up an iPhone making unit in the 43 acres of land allotted to it, with employment potential of over 10,000 people. Unlike Wistron's first plant in Bengaluru, which manufactures iPhone SE and 6S models, the new facility is likely to manufacture a wider range of Apple's devices, but not the high-end ones like Apple XS or XS Max.

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According to Tarun Pathak, Associate Director at Hong Kong-based Counterpoint Research, the Indian electronics market is growing fast and has gained a significant advantage on some of the competing countries. "Not only India offers a great domestic opportunity, but a sizeable export opportunity as well if done properly. So it's right time for the likes of Wistron to expand operations in India," Pathak told IANS.

"I think to start with, it makes sense for Apple to localise assembling of models that have the potential to scale up and then slowly expands it to entire portfolio," Pathak said. The iPhone maker is seeking tax relief and other incentives to begin assembling more handsets and open its branded stores. Its proposal to set up a manufacturing unit is also being evaluated.

The customers today are holding on to their older iPhones a bit longer than in the past. "When you pair this with the macroeconomic factors, particularly in the emerging markets, it resulted in iPhone revenue that was down 15 per cent from last year," CEO Tim Cook said in January.

Apple has already begun reducing the price of iPhone for third-party distributors in China and may follow the same in India where iPhone is considered expensive. According to Counterpoint Research, Apple's India shipments were 1.7 million in 2018, almost 50 per cent lower than 2017 shipments of 3.2 million units.

"Going forward, Apple needs to keep a close eye on possibility of domestic sourcing and how many of its suppliers are setting up units in India. This will be challenging for Apple considering its complex supply chain," Pathak emphasised.