Apple’s tough price negotiation forces Wistron out of India

People exit from the gate of Wistron, a Taiwanese-run iPhone factory at Narsapura, about 60 km from Bangalore on December 13, 2020. - Authorities vowed to crack down on workers who went on a violent rampage at a Taiwanese-run iPhone factory in southern India over allegations of unpaid wages and exploitation, with 100 people arrested so far. (Photo by Manjunath Kiran / AFP) (Photo by MANJUNATH KIRAN/AFP via Getty Images)

Wistron, the first company to produce iPhones in India, recently pulled out of the Apple foundry business in India, according to sources from Indiatimes. The source claims that Apple’s tough price negotiations kept the company from making a profit. Wistron was the very first company to produce iPhones in India. The company did produce the iPhone SE and other models for Apple. Later, Foxconn and Pegatron built their own iPhone plants in India and started making the most recent flagship models. According to reports, India would likely produce 25% of all iPhones by 2025 and 50% by 2027.


Wistron, however, made its choice to leave this market. According to Indiatimes, which cited Wistron personnel and business insiders, Wistron has already decided to sell its iPhone assembly facility close to Bengaluru and will instead focus on other ventures.

The inside source said

“Wistron’s Apple business in India is not making money. It tries to negotiate higher profit margins with Apple, but since it is much smaller than Foxconn and Pegatron in the global market, it does not have the corresponding leverage

The Apple division of Wistron was also facing issues in India. Riots broke out at the company’s Bengaluru factory in 2020 as staff moaned about getting low pay. This has cost the company millions of dollars and sparked inquiries from both Apple and the Indian govt. According to the findings of the probe by the govt, Wistron did have a number of major labour law breaches. This includes unpaid wages and other issues. After that, Apple stopped working with Wistron and placed the company under observation.

Wistron is selling off all its iPhone factories

Despite being the first company to produce iPhones in India, Wistron is the smallest of the three foundries. Its impact on Apple’s goals to increase iPhone production in India is therefore modest. Also, Luxshare, which was given a contract to produce the premium iPhone models from the start, reportedly bought Wistron’s two original iPhone plants.

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Wistron also has a third plat which the company will sell off. A new report from ITHome today claims that Tata Group will buy off the third iPhone plant from Wistron. This plant at the moment is getting set to handle the iPhone 15. Though, the deal is not final yet the report claims that Tata Group already have top staff who will handle the “new” factory. The report further claims that the top staff are hired from China and did not adjust to the local work culture. The factory is roughly 25 miles from the city. Also, the roads are in terrible shape, there is heavy traffic, and it is quite difficult to commute to and from work. This makes it tough to hire local management.

Wistron Issues

Wistron India has faced an array of issues recently. At the Wistron India factory in Narasapura, next to Bangalore, a major labour protest took place in December 2020. Staff at the company claimed that their hours were harsh and that they weren’t paid their wages on time. The violent protest by factory workers caused damage to cars and other vital tools.

Apple Wistron link

After the mishap, the state govt of Karnataka began a probe into Wistron India’s labour methods. The govt found that the company broke several labour laws, notably failing to pay wages and failing to provide a livable working place. As a result, Wistron India was taken off the list of firms that the Karnataka state govt had approved. The company was also forced to alter its hiring methods.

In addition to worker issues, Wistron India has come under fire for its environmental practise. The company was fined by the Karnataka State Pollution Control Board in 2019 for abusing environmental rules. The board found that Wistron India had dumped untreated garbage into the environment, polluting the nearby aquifer.

Source/VIA :
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