Indian firm Optiemus, Taiwan's Wistron sign deal to make mobile devices

Taiwanese giant Wistron is expanding its business to go beyond manufacturing mainly iPhones in India following an agreement with Optiemus Electronics to make mobile devices, IT hardware and telecom products and is now exploring electric vehicles.

Wistron, a $30 billion original design manufacturer (ODM), is not new to the world of electric vehicles. Many years ago, it had teamed up with Chinese automaker NIO to make the electric control systems of cars.

Delhi-based Optiemus is eligible for incentives under the Indian government’s production-linked incentive (PLI) scheme for mobile devices and IT hardware. This is an advantage that Wistron could leverage to manufacture mass-priced products for its customers across the globe from India. 

The strategic alliance will design and manufacture tablets, laptops, hearables, wearables, telecom products, Internet of Things/industrial Internet of Things, smart meters and automotive-electric vehicle products under contract manufacturing.

As part of the deal with Wistron, Optiemus will invest over Rs 1,350 crore over five years. It is aiming at a revenue of Rs 38,000 crore across all products. It will be working out details, initially on the revenue share and financial details of the alliance, with Wistron soon.  

David Shen, president and CEO of Wistron Smart Devices, said: “We wanted an Indian partner to grow the business in the country. PLI will be a key enabler to bridge any gaps in developing the ecosystem for the next decade. It is time to extend our support to our Indian partner as we embark on a wonderful and exciting journey.”

Wistron has a manufacturing plant exclusively for Apple in Karnataka and is among a clutch of global companies who are eligible for the PLI scheme. The others include Foxconn, Pegatron and Samsung. Wistron also manufactures some laptops for Xiaomi, Dell and Acer in India. 

Sources said Wistron invested Rs 1,250 crore between August 2020 and March this year, exceeding its commitment to the Indian government, under the PLI investment requirements, by around 25 per cent.

Unlike Foxconn (the world’s largest maker of the iPhone), Wistron did not go in for two separate applications under the PLI scheme – one for Apple and the other for non-Apple manufacturers. However, its agreement with Optiemus allows it to continue manufacturing for Apple.  

Earlier Wistron had had a joint venture with Optiemus to manufacture only mobile phones for leading global brands in India like HTC and LG. Optiemus, which is promoted by Ashok Gupta, bought Wistron’s 19.91 per cent stake in the joint venture company this year as most of these mobile brands had reduced or stopped production due to competition from the Chinese and Koreans. 

“We have had a long relationship with Wistron, but it was only for manufacturing mobile devices. We have now extended that relationship to include a range of electronics products. Also, together, we are going to make India a design hub,” said A Gururaj, Optiemus MD.

He was non-committal on whether Wistron will once again take a stake in his company and said they 'will see' in the future.  He merely said that the investment will be made by Optiemus but did not give any detail on how the money will be raised.  

Gururaj, who has earlier worked for Wistron, said the latter could leverage the PLI eligibility of Optiemus to enter the affordable end of the market in mobile devices and IT hardware.

Unlike Wistron, domestic players eligible for PLI do not have to manufacture phones with a production value of over $200. “Therefore, for Wistron which is looking at making phones which are less than $200 which accounts for the bulk of the market, the alliance provides them with a great opportunity to do so. And we are looking at both the domestic as well as the global market,” said Gururaj.

But Wistron already has competition, at least in electric vehicles in the global arena.  A month ago, another key Apple ODM vendor, Foxconn, unveiled its own plans to assemble 250,000 electric vehicles per year for Fisker Inc, a US-based start-up.