Tata Electronics has won a big victory in the race of making iPhone. In fact, Tata has bought a major stake in the Tamil Nadu plant of Taiwanese contract manufacturer Pegatron, which makes iPhones. After this deal, the pace of iPhone manufacturing in India may increase. However, no response has been given by Tata Electronics and Pegatron regarding this deal.
Tata group bought 60 percent stake
According to the report, Tata Electronics is expected to have 60 percent stake through this deal. With this deal, Pegatron will produce iPhone in joint venture with Tata. In this deal, Tata Group will have to make a payment of 150 to 200 million dollars. Tata will work with Wistron and Pegatron to manufacture iPhone in India. Taiwan’s Foxconn company has the contract to make iPhone.
The pace of making iPhone will increase
Apple’s contract manufacturers currently have the capacity to produce 40 million iPhones. The company manufactures around 30 to 35 million iPhone units every month. After this deal, it is believed that iPhone manufacturing may speed up. Also, it can help in improving the supply chain of iPhone outside China, because geopolitical tension can have a negative impact on the supply chain of iPhone. After the deal with Tata Electronics, the demand for iPhone in India can be met. Also, the demand for iPhone in India’s neighboring countries can be met. According to Apple, there has been an increase in demand for iPhone in the last few months.
4.5 million iPhones are being manufactured annually
A multi-partner strategy has been planned by Tata Group for manufacturing iPhone components. Pegatron has 9500 employees in India. Also, 4.5 million iPhones are produced annually. The company remains the second largest company in the world from the year 2022.
Will benefit from PLI scheme
The government has started the Production Linked Initiative (PLI) scheme to make iPhones in India, which Tata Group and Pegatron can benefit from. Taiwan’s Wistron has become the first Indian unit to do global iPhone manufacturing by acquiring the iPhone assembly plant from salt to steel.
How might Tata Electronics’ expertise benefit Pegatron in navigating the Indian market?
Time.News Editor (TNE): Good day! We are thrilled to have with us today Dr. Anjali Rao, a leading expert in technology and manufacturing. Dr. Rao, thanks for joining us to discuss the recent news about Tata Electronics acquiring a significant stake in the Pegatron plant in Tamil Nadu.
Dr. Anjali Rao (DAR): Thank you for having me! I’m excited to delve into this important development in the mobile manufacturing landscape.
TNE: Let’s jump right in. Tata Electronics has reportedly secured a 60% stake in the Pegatron plant. How significant is this move for both companies, and the iPhone manufacturing scene in India?
DAR: This is a monumental step for Tata Electronics. With a 60% stake, Tata gains considerable control over operations and production processes. Pegatron has been a key player in iPhone manufacturing. By entering this joint venture, Tata not only accelerates its manufacturing capabilities but also adds to India’s ambitions to become a global manufacturing hub for electronics.
TNE: We know that Apple’s strategy has been gradually shifting towards diversifying its supply chain away from China. How do you see this deal impacting Apple’s operations in India?
DAR: Absolutely, Apple is looking to de-risk its supply chain. This joint venture aligns perfectly with their strategy to localize production. With Tata Electronics in the picture, Apple can leverage Tata’s strong local expertise and resources to ramp up production. This will potentially lead to quicker turnarounds and reduced costs, enhancing iPhone availability in India.
TNE: Interesting! Are there specific advantages that Tata Electronics brings to this partnership that Pegatron might not have leveraged fully on its own?
DAR: Definitely. Tata Group has robust infrastructure, extensive networks, and experience in operations across different sectors. They also have a deep understanding of the Indian market, which can help optimize supply chains further. Additionally, Tata’s strong brand reputation and commitment to quality will ensure that Pegatron continues to meet Apple’s stringent standards.
TNE: The deal was announced, but both Tata Electronics and Pegatron have not provided any official comments yet. Why do you think that might be?
DAR: It’s not uncommon for companies to maintain a strategic silence, especially in the initial stages of negotiations or transitions. They may be assessing operational impacts and anticipating regulatory scrutiny. Sometimes, they might also be preparing for a more formal announcement that outlines their strategy and vision for the partnership.
TNE: Looking ahead, what challenges do you foresee for Tata Electronics in managing this new stake in Pegatron?
DAR: There will certainly be challenges, such as integrating workflows between the two companies and managing expectations from both sides. Additionally, they will have to navigate the competitive landscape of smartphone manufacturing in India, which continues to evolve rapidly with other players entering the market. Ensuring quality and meeting Apple’s standards will be vital as well.
TNE: Lastly, what does this move signify for the future of technology manufacturing in India?
DAR: This deal represents a significant shift towards building a robust manufacturing ecosystem in India. It signals that multinational corporations are increasingly considering India as a viable manufacturing hub, thanks to government initiatives like ‘Make in India.’ In the long run, this could pave the way for increased foreign investment and technological advancements in the country.
TNE: Thank you so much, Dr. Rao, for your insights today. This partnership indeed shows promising developments for India’s technology manufacturing sector.
DAR: Thank you for having me! I look forward to seeing how this story unfolds.