Tata Group likely to become first Indian entity to make iPhones after acquiring Apple supplier’s factory: Report

Tata Group, India's largest conglomerate, is all set to become the first Indian company to manufacture iPhones. The company is in the process of acquiring Wistron Corp's iPhone assembly plant located in Karnataka, according to Bloomberg. The factory currently employs over 10,000 workers who assemble the iPhone 14 models.

The over $600 million deal is expected to be finalised by August, the report added, quoting sources.

As part of the agreement, Tata Group will honour Wistron's commitment to ship iPhones worth $1.8 billion from the factory by March 2024, according to Bloomberg. Additionally, there are plans to triple the workforce at the factory. The commitments are also part of the effort to take advantage of the lucrative production-linked incentive schemes and other governmental schemes to attract manufacturing to the country.

Aligning with Apple's diversification strategy

The move aligns with Apple's strategy to diversify production beyond China, and it will strengthen India's domestic manufacturing efforts. The deal also supports the Indian government's "Make in India" initiative, which aims to boost the country's manufacturing sector and reduce reliance on imports.

Tata Group's entry into iPhone manufacturing could have far-reaching implications for the Indian smartphone sector. It is speculated that the development may inspire other global companies to consider production in India, thus challenging China's dominance in the manufacturing sector. The deal, once finalised, may also pave the way for the assembly of more advanced iPhone models, including the upcoming iPhone 15, in India.

Post-Tata-Wistron deal likely scenario

Reports from May 2023 revealed that Tata Group was gearing up to manufacture Apple's iPhone 15 and iPhone 15 Plus models in India. The Cupertino-based company's decision to diversify its supply sources owing to geopolitical issues and the ongoing pandemic has led to this strategic development. However, manufacturing iPhones in India won't be without significant challenges. These include meeting Apple's stringent quality standards and addressing potential labour-related issues.

With Tata Group's pre-existing involvement in the electronics industry and aspirations in chipmaking, the move to assemble iPhones aligns with its long-term strategy to diversify its operations. It signifies Tata’s broader efforts to establish a stronger foothold in the global electronics manufacturing sector and dip its toes deeper into the hardware side of tech. Apart from iPhones, the conglomerate, under the banner of Tata Electronics, is also reportedly looking to begin manufacturing semiconductor chips in the country.

As part of its aggressive expansion strategy, Tata Group had already started the production of iPhone chassis in the country back in May. This strategic manufacturing initiative took place weeks after a detailed meeting between Apple CEO Tim Cook and Tata Sons Chairman N Chandrasekaran during Cook's India visit in April.