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Why it is a good bet for Tatas to make high-end iPhones as Apple eyes India

With Tata Electronics now hogging limelight for iPhone manufacturing, experts said that with their ambition on EVs, it makes sense for Tata to gain expertise in manufacturing iPhones in country

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IANS New Delhi

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With Tata Electronics now hogging the limelight for iPhone manufacturing in India, industry experts on Monday said that with their ambition on semiconductors and EVs, it only makes sense for the Tata Group to gain expertise in manufacturing high-end iPhones in the country.
Currently, iPhone 12 and iPhone SE (second generation) are being manufactured/assembled at Taiwan-based iPhone manufacturer Wistron's Karnataka factory, which Tata Electronics is set to take over soon.
Once the final takeover is done, the facility is likely to manufacture new Apple products that may include the upcoming iPhone series.
"With the new make-in-India potentially entry to mid-level iPhone 15 series, the Tata Group will make a modest beginning in this new partnership," according to Prabhu Ram, Head, Industry Intelligence Group, CMR.
"We anticipate a remarkable growth trajectory for the Tata Group in the coming years as they gain expertise and experience in high-end iPhone manufacturing," he told IANS.
In the years ahead, the Tata Group has the potential to solidify their position as a pivotal player in the iPhone manufacturing ecosystem.
Wistron's factory in Karnataka, that employs about 12,000 people, constitutes a major chunk of its business in the country.
According to reports, Wistron will be winding down its operations soon and is "likely to approach the National Company Law Tribunal and the Registrar of Companies to dissolve its India operations".
Meanwhile, the manufacturing/assembly of iPhone 13 and 14 in the country will continue at Foxconn's Sriperumbudur facility on the outskirts of Chennai, according to sources.
As the iPhone consumption increases in the country, Apple needs more suppliers to ramp up production here, as it reportedly aims to take away a significant chunk of manufacturing from China to countries like India and Vietnam.
'Make in India' shipments from Apple grew 65 per cent (on-year) by volume and 162 per cent by value, taking the brand's value share to 25 per cent in 2022, up from 12 per cent in 2021, according to Counterpoint Research.
According to senior research analyst Prachir Singh, Apple's EMS (electronics manufacturing services) partners Foxconn Hon Hai and Wistron were the fastest growing manufacturers among the top 10 in Q4 2022 and "the growth was also fuelled by increasing exports from Apple".
Overall, iPhone exports from the country surged to cross $5 billion (over Rs 40,000 crore) in FY23.
Apple set a quarterly record in the January-March period in India and grew very strong, in double digits year-over-year, according to the company's CEO Tim Cook who was in India last month to open the first branded retail stores in Mumbai and New Delhi.
Tarun Pathak, Research Director at Counterpoint, told IANS that Tatas' semiconductor ambitions are serious and came at a very important juncture amid India's digital goals.
"First, they can leverage the semiconductor strength in their EV business and second, their chips can be aligned with Apple in the future and the learning curve will be great for them," Pathak told IANS.
Third, the government policy will help them with OST and ATMP and scale their semiconductor ambitions.
Outsourced Semiconductor Assembly and Test (OST), also referred to as assembly, testing, marking, and packaging (ATMP) units, plays a crucial role in semiconductor manufacturing.
"Tatas are known for their diversified business and now with everything connected and semiconductors being their key components, it all makes perfect sense for them to manufacture high-end iPhones," Pathak added.
(Nishant Arora can be reached at nishant.a@ians.in)
--IANS
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(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: May 22 2023 | 8:07 PM IST

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