Will TATA manufacture iPhones in India?

The answer might be yes but there is no official statement from the company rather there are several clues that show that TATA will manufacture iPhones in India, if it becomes real then it will be a big opportunity for the nation as well as for the companies because this will create several job opportunities and it will help in our GDP also, let’s see in detail about this talk in this blog post welcome.

Introduction

This is one of the most exciting news ever, in the history of the iPhone it will be the first time when an Indian company manufactures iPhones that will lead to a drop in their prices. On 9 September 2022, a report was published by Bloomberg in which there is a news that states one of the iPhone manufacturers Wistron will venture with the top conglomerate TATA will manufacture iPhones in India, when the deal is finalized, TATA will become India’s first manufacturer that will manufacture iPhones in India, finally, after 20 days of this news, Apple incorporation announced that iPhone 14 will be manufacture in India.

If you observe the Apple’s statement it doesn’t specified, the manufacturer who will manufacture their iPhones in India.

How an Apple iPhone is Manufactured

The manufacture of an Apple iPhone is done in three steps which are performed in different countries and companies. The processes are,

1. Designing
2. Manufacture
3. Assembly

Designing

Before going to know about the deal first let’s understand how an Apple iPhone is manufactured, in which the first part is designed, and this process is operated in California by Apple incorporation itself but don’t forget that in California only the designing takes place.

Manufacture

After the designing part is over then it is sent to the different countries in the world where there are 200 mobile parts suppliers receives it. In which some important parts are manufactured by,

1. Germany – Germany manufactures Accelerometers.
2. Switzerland – Switzerland manufactures Gyroscopes.
3. China – China manufactures Batteries.
4. Japan – Japan manufactures Cameras, compasses, and LCD screens.

When the suppliers receive the design, they start manufacturing their respective parts as per Apple’s demand and expertise.

Assembly

After the manufacturing process is over then it is moved to the assembly process. Assembly is the place where the final product is developed. Mostly iPhones are assembled in Taiwan.

Made in China

There might a question arise in your mind that the parts are sent to 200 places then why in every iPhone made in China is written and the reason is that most of the iPhones are assembled by only three major manufacturer companies they are,

1. Pegatron
2. Foxconn
3. Wistron

All these three companies are Taiwanese companies, and all these happens because China claims that Taiwan is also a part of China. Because of this Apple wants to make good relations with China so he promotes with the tag MADE IN CHINA.

But in recent days if you have noticed you might notice that instead of MADE IN CHINA you would find ASSEMBLED IN INDIA, so the question is that is Apple makes iPhones in India and the answer is yes.

Pegatron

Taiwanese electronics manufacturer Pegatron Corporation focuses primarily on creating computing, telecommunication, and consumer electronics for well-known brands.  Additionally, it creates, designs, and produces computer accessories and parts. Notebooks, netbooks, desktop PCs, gaming consoles, portable devices, motherboards, video cards, LCD TVs, and broadband communication products like cellphones, set-top boxes, and cable modems are among Pegatron’s main offerings.

Foxconn

Hon Hai Precision Industry Co., Ltd., a Taiwanese multinational electronics contract manufacturer with its headquarters in Tucheng, New Taipei City, Taiwan, was founded in 1974. It is also known as Foxconn worldwide and does business as Hon Hai Technology Group in China and Taiwan. The Group had NT$5.99 trillion in annual revenue in 2021 and was listed as number 22 in the Fortune Global 500. It is the biggest manufacturer and service provider of technology in the world. Despite having its headquarters in Taiwan, the corporation is one of the biggest employers globally and the biggest private employer in the People’s Republic of China. The company’s founder and previous chairman is Terry Gou.

Wistron

Taiwan-based Wistron Corporation is a producer of electronics. Before it was spun out in 2000, it served as Acer Inc.’s manufacturing division. The business creates and produces goods as an original design manufacturer for other businesses to market under their brand name. Products from Wistron include laptop and desktop computers, servers, storage, LCD TVs, handheld gadgets, as well as tools and equipment for use in the medical field. Wistron has 12 production facilities, 10 research and development facilities, and 14 customer service centers. It also employs over 80,000 people worldwide.

History

If you look back at 2017 Foxconn set up India’s first iPhone manufacturing setup in Tamil Nādu by seeing this other manufacturer like Wistron and Pegatron set up their manufacturing units in Bengaluru and Chennai. You might think that if India has this many manufacturing units, then why major iPhone models are not manufactured here for example their Flagship models are not assembled in India.

All these companies only assemble the older models like iPhone 11, iPhone 12, and iPhone 13 which might stop production because they are the older versions. Even in these models, the higher variants are not assembled in India.

In October 2020 Times of India covered a piece of news was TATA electronics wants to setup a manufacturing plant in Tamil Nādu, TTATA also invested 5000 crores in it, after two months of this news a new news came that TATA raised 1 billion dollars but in all these news TATA didn’t mention any manufacturers name.

Price

Even the base models are assembled in India, but their prices are also too high in the world, there are some reasons behind it let’s see,

Reason number 1: As we discussed before only the base models are assembled here and the top models are imported, if we import devices from other countries, we have to pay Taxes, for example, Apple has to pay a 22% import duty to the government not only this on iPhones 18% GST is also added Afterall all the taxes Apple imposes on the customers because at last, every company wants to make a profit.

Reason number 2: By setting up the manufacturing plants in India Apple fulfills the 70% demand in addition Apple will get the tag MADE IN INDIA for the iPhones by this Apple need not to pay the 22% import duty to the government and also Apple will get benefitted by PLI- Production Linked Incentive Scheme by which Apple will get incentives of 4% to 6% on incremental sales, which will be the double profit for the Apple company.

After all of these kinds of stuff even apple is not ready to lower their prices instead in 2019, they fought a legal battle with the government to increase the incentives.

Reduction in Price

By only assembling the iPhones we cannot reduce the price instead we have to manufacture the parts, if you want to see the example in price difference let us take China where major iPhone components are manufactured here only because of this there in no big difference in the price of iPhones in China and United States. The reason is that the place of raw materials and finished product is same then the cost will be less.

TATA Wistron deal

As we discussed above it will be more helpful if the TATA Wistron deal is approved, India will also get the same benefit as China.

According to Bloomberg’s report, TATA electronics will manufacture the body of the iPhone by which Apple will save the import duty and the manufacturing cost will get reduced the chance of getting an iPhone at a lower price will be more.

This will not only benefit the customer as well as it will benefit the nation by

1. boosting the Indian economy.

2. Creating new jobs.

3. Taxes

4. GDPM growth

Conclusion

The important question arises of what the current status of this deal is, and the answer is the deal is still in negotiation but till now neither TATA nor Wistron had not given any official update if we refer the Bloomberg’s report, we come up with three outcomes.

OUTCOME NUMBER: 1

TATA and Wistron creates a joint venture and setup a manufacturing unit.

OUTCOME NUMBER: 2

TATA electronics buys Wistron’s share and indirectly aid the project.

OUTCOME NUMBER: 3

TATA can do both of the above outcomes.

It is predicted that very soon we can see iPhones manufactured by TATA in India.

Mohammed