Taiwan-based Wistron looks beyond iPhones with plans for second unit

The firm is looking to tap other smartphone manufacturers, which have tied up with rivals such as Foxconn, to make devices locally

Taiwan-based Apple’s local assembler in India, Wistron, is planning to set-up an integrated smartphone manufacturing unit in Bengaluru to diversify its business beyond assembling iPhones, people familiar with the development said.

Wistron’s existing unit in Bengaluru, where it assembles the low-cost iPhone SE, hasn’t exactly fared well for the company. With sales of the Apple device not breaking any records, the production volumes have proven to be too small for the manufacturer to make money.
 

“Wistron will be looking to diversify its investments in India. Their current unit in Bengaluru is producing just 25,000-odd units of the iPhone, and those volumes are far too low for them to make any money. It’s a well known fact that Apple squeezes vendors globally for margins,” said Neil Shah, research director at Counterpoint Research.

The new unit would come up at over 100 acres of land at the Taiwanese electronics manufacturing cluster in Devanahalli, near the Bengaluru airport. With this, Wistron is also looking to take advantage of government sops for value addition in electronics manufacturing, rather than simply assembling smartphones here. The scale that the Indian market offers would help it in becoming a viable hub to export products to countries in West Asia and Africa, the people said. Wistron did not respond to an email seeking comments sent on last Thursday. 

The company is looking to tap other smartphone manufacturers, which have tied up with rivals such as Foxconn, to manufacture devices locally.
 

India has made it more expensive for companies to import smartphones into the country, as it is looking to promote local manufacturing. The country houses the fastest-growing smartphone market in the world, but the penetration still remains low given that about 250 million individuals have smartphones here.
 

While the government initially favoured assembling of smartphones locally, it has now begun pushing for more value addition in the manufacturing of components. Recently, import duties on electronics components were increased, sending a clear message to companies that they should begin manufacturing here.

Another reason for the partnership to not work has been Apple’s failure to cut a deal with the Indian government for subsidised import of components into the country. If the government had cleared Apple’s demands, more of its devices might have been assembled here, bringing more business to Wistron’s doors.