Unable to make a profit, Wistron is giving up iPhone assembly in India

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in iPhone
Apple supplier Wistron is selling its iPhone assembly factory in India because Apple's terms prevent it from making a profit in the region.

Wistron exits Apple India business
Wistron exits Apple India business


A report on May 2 had suggested Wistron was gradually scaling down a majority of its operations in India and would to withdraw a significant portion of its presence from the country within the following year. The move is now official, according to India's Economic Times which spoke to company executives.

Wistron has been considering an exit strategy due to a lack of long-term profitability in solely functioning as an assembly provider for the iPhone. Instead, the company plans to focus on its core IT manufacturing operations in countries such as Vietnam and Mexico.

"Wistron has not been able to make any money from the Apple business in India," an executive said. "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."

Despite Wistron's role in assembling the iPhone SE and other models for Apple in India, the company faced challenges in achieving profitability. Unlike larger suppliers such as Foxconn and Pegatron, which handle inventory management for Apple in the country, Wistron could not establish itself in that particular aspect of the business.

"There need to be systems in place to gauge demand and ship to various units, which Wistron lacked," said another executive. "Plus, it is a much smaller player as compared to Foxconn and Pegatron."

Some Wistron employees also said the company had had problems retaining workers at its facility in Kolar, India.

"There were a lot of management issues. China and India work in different ways, and they did not understand that," one employee said. "The mindset of Indian labourers are different, but they don't pay any heed, leading to a high rate of attrition."

Currently, Wistron is selling its iPhone assembly facility in Kolar, near Bengaluru, to the Tata Group. The Tata Group is presently conducting trials to assemble forthcoming iPhone 15 models in India.

Wistron established its presence in India in 2008 by opening a repair facility that serviced various devices it manufactured, including PCs, laptops, and servers. In 2017, the company expanded its operations and began manufacturing iPhones for Apple.

Read on AppleInsider

Comments

  • Reply 1 of 8
    22july201322july2013 Posts: 3,615member
    Well, the new Foxconn plant may still be built in India and this may sate the Indian government's demands for Apple to build iPhones in India.

    https://appleinsider.com/articles/23/05/09/foxconn-purchased-massive-plots-of-land-in-india-vietnam-for-factories
  • Reply 2 of 8
    danoxdanox Posts: 3,050member
    India, like Brazil will never work at any large scale…….. unless you want a call center.
    edited May 2023
  • Reply 3 of 8
    tokyojimutokyojimu Posts: 530member
    danox said:
    India, like Brazil will never work at any large scale…….. unless you want a call center.
    Even with call centers. Most American companies have moved their call centers from India to the Philippines.
  • Reply 4 of 8
    davendaven Posts: 705member
    Can someone explain what this means > Unlike larger suppliers such as Foxconn and Pegatron, which handle inventory management for Apple in the country, Wistron could not establish itself in that particular aspect of the business.
  • Reply 5 of 8
    anantksundaramanantksundaram Posts: 20,407member
    danox said:
    India, like Brazil will never work at any large scale…….. unless you want a call center.
    Step aside, folks! We have an I-know-better-than-Apple India expert here!

    /slowclapping
    hammeroftruthwatto_cobramuthuk_vanalingam
  • Reply 6 of 8
    anantksundaramanantksundaram Posts: 20,407member
    daven said:
    Can someone explain what this means > Unlike larger suppliers such as Foxconn and Pegatron, which handle inventory management for Apple in the country, Wistron could not establish itself in that particular aspect of the business.
    My takeaway was simply that Apple didn’t have a lot of confidence in them (or think very highly of them). 

    But who knows, I could be wrong. 
  • Reply 7 of 8
    danoxdanox Posts: 3,050member
    danox said:
    India, like Brazil will never work at any large scale…….. unless you want a call center.
    Step aside, folks! We have an I-know-better-than-Apple India expert here!

    /slowclapping

    You do know China actually built that Thorium Reactor how’s India doing? And the Chinese are planning on building 11 more dams on the Brahmaputra River over next 10-15 years, India and Bangladesh have bigger problems the Brahmaputra won’t make it to the Bay of Bengal in the end, note the Mekong River has the same problem the Chinese, and they will actually get the infrastructure built, unlike India, and the other countries in the area who won’t, the Chinese have a total of 15 more dams planned. How much do you want to bet they will actually get them finished. I do know that….. it pays to be an informed investor.

    https://en.wikipedia.org/wiki/List_of_dams_on_the_Brahmaputra_River
    edited May 2023
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