Apple supplier Wistron has made the decision to sell its iPhone assembly factory in India as it struggled to make a profit in the region under Apple's terms. The move comes after reports in early May hinted at Wistron gradually scaling down its operations in India and planning to withdraw a significant portion of its presence within the next year. India's Economic Times confirmed the official nature of the decision after speaking to company executives.
According to a report by The Economic Times, Wistron is faced with a lack of long-term profitability solely as an iPhone assembly provider and is now looking to concentrate on its core IT manufacturing operations in countries like Vietnam and Mexico. The report cites an executive saying that Wistron was unable to generate any profits from its Apple business in India and attempted to negotiate for higher margins. However, being a smaller player compared to global giants like Foxconn and Pegatron, Wistron lacked the necessary leverage.
Despite its role in assembling iPhones, including the iPhone SE, for Apple in India, Wistron encountered difficulties in achieving profitability. Unlike larger suppliers such as Foxconn and Pegatron, which handle inventory management for Apple in the country, Wistron struggled to establish itself in that particular aspect of the business.
Another executive cited in the report highlighted the need for effective systems to gauge demand and ship products to various units, which Wistron lacked. Additionally, Wistron faced challenges due to its smaller size compared to Foxconn and Pegatron.
Furthermore, Wistron faced management issues and struggled to retain workers at its facility in Kolar, India, according to the report. Differences in work culture between China and India contributed to the challenges faced by the company. The mindset of Indian workers differed, but their concerns were not addressed, leading to a high attrition rate.
As part of its restructuring, Wistron is currently selling its iPhone assembly facility in Kolar, near Bengaluru, to the Tata Group. An earlier report from TrendForce suggests that the Tata Group is conducting trials to assemble upcoming iPhone 15 models in India.
Wistron initially entered the Indian market in 2008 by establishing a repair facility for various devices it manufactured, including PCs, laptops, and servers. In 2017, the company expanded its operations and began manufacturing iPhones for Apple.