Tag: tata

Apple Supplier Pegatron Said to Be in Talks With Tata to Sell Its Only India iPhone Plant

Pegatron is in advanced talks to hand over control of its only iPhone manufacturing facility in India to the Tata Group, said two sources with direct knowledge, marking the Taiwanese firm’s latest scale back of its Apple partnership.

Under the deal, which has received the backing of Apple, Tata plans to hold at least a 65 percent stake in a joint venture that will operate the Pegatron plant near Chennai city in the southern Indian state of Tamil Nadu, with the Taiwanese firm providing technical support and holding the rest, one of the sources said.

Tata, one the largest conglomerates in India, will operate the joint venture through its Tata Electronics unit, the second source said.

The Pegatron India factory has around 10,000 employees and makes 5 million iPhones annually. It is the last such facility operated by the firm after it forfeited control of an iPhone plant in China last year to rival Luxshare in a $290 million (roughly Rs. 2,415 crore) deal.

Tata and Pegatron did not respond to emailed requests for comments. Apple declined to comment. The sources did not share financial details of the ongoing negotiations.

Apple is increasingly looking to diversify its supply chain beyond China amid geopolitical tensions between Beijing and Washington. For India’s Tata, the Chennai Pegatron plant will bolster its iPhone manufacturing plans.

Tata already operates an iPhone assembly plant in the neighbouring southern state of Karnataka, which it took over from Taiwan’s Wistron last year, and is also building another in Hosur in Tamil Nadu, where Pegatron is likely to emerge as its joint venture partner.

Pegatron has for months also been building another iPhone factory at its Chennai campus, and the Tata deal talks include taking over that facility as well, the first source said.

The talks between Tata and Pegatron for the factory are expected to close in six months and will see all of the Pegatron India employees move to the joint venture entity, the first source added.

Apple’s iPhone contract manufacturers in India currently include Tata, Pegatron and Foxconn. Tata is key to Apple’s growing ambitions in India, which analysts estimate will contribute 20-25 percent of total iPhone shipments this year, from 12-14 percent last year.

The reasons for Pegatron’s gradual withdrawal from its Apple business, including in India, were not known. Last year, Pegatron said the China plant deal was done to raise capital to “optimise its business”.

© Thomson Reuters 2024

Apple launched the iPad Pro (2022) and the iPad (2022) alongside the new Apple TV this week. We discuss the company’s latest products, along with our review of the iPhone 14 Pro on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.
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Tata Wants to Build Country’s Biggest iPhone Assembly Plant as Apple Seeks to Up Manufacturing in India

Conglomerate Tata Group plans to build one of India’s biggest iPhone assembly plants, tapping Apple’s ambitions to increase manufacturing in the South Asian country.

Tata wants to construct the factory in Hosur in the southern Tamil Nadu state, according to people with knowledge of the matter. The facility will likely have about 20 assembly lines and employ 50,000 workers within two years, according to the people, who declined to be named discussing unannounced plans. The goal is for the site to be operational in 12 to 18 months.

The plant would bolster Apple’s efforts to localise its supply chain and strengthen its partnership with Tata, which already has an iPhone factory it acquired from Wistron. in the neighbouring Karnataka state. Apple is diversifying its operations away from China by working with assembly and component manufacturing partners in India, Thailand, Malaysia and elsewhere.

An Apple spokesman declined to comment, while a Tata representative didn’t respond to a request for comment.

The Indian conglomerate has taken other steps to increase its business with Apple and expand beyond its traditional businesses that range from salt to software. It has accelerated hiring at its existing facility in Hosur, where it produces iPhone enclosures, or metal casings. Tata has also said it’ll launch 100 retail stores focused on Apple products. For its part, Apple has opened two stores in the nation and is planning three more.

Prime Minister Narendra Modi’s production-linked subsidies have spurred Apple’s key suppliers such as Taiwan’s Foxconn and Pegatron to ramp up in India. That helped Apple assemble more than $7 billion of iPhones in India in the previous fiscal year, increasing the country’s share of the device’s production to about 7 percent. The rest are assembled in China, which until a few years ago made all of them.

The new plant is set to be mid-sized among iPhone factories globally. It would likely be bigger than the one Tata acquired from Wistron, which employs more than 10,000 people, and smaller than Foxconn’s biggest China facilities that employ hundreds of thousands.

Apple and Tata could likely urge the government to award subsidies for the new factory as it’s expected to begin production just as previous state-backed financial incentives are set to expire.

© 2023 Bloomberg L.P.

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Apple to Develop iPhone 17 in India by 2024, Up Proportion of Locally Made Phones to 25 Percent: Ming-Chi Kuo

Apple is planning to increase the proportion of iPhone units produced in India, according to details shared by TF Securities International analyst Ming-Chi Kuo. In a new blog post on Thursday, the analyst states that the Cupertino company is also working on developing the iPhone 17 — expected to launch in global markets in 2025 — in India starting in the second half of next year. Meanwhile, the company’s production scale in two regions in China is expected to decline considerably in 2024.

In a Medium post, Kuo stated that Apple assembler Foxconn, which currently owns nearly 80 percent of the production lines for iPhone models in India, is expected to scale down its production in China next year by up to 45 percent and 85 percent in Zhengzhou and Taiyuan, respectively. Meanwhile, up to 14 percent of global iPhone units that are shipped globally — including the iPhone 15 — are currently produced in India — this number is expected to rise to between 20 percent and 25 percent by 2024, according to the analyst.

Meanwhile, the iPhone 17 is expected to be the first model to be developed outside China, according to Kuo. The company will start the new product introduction (NPI) process for the iPhone 17 in India, during the second half of 2024. In order to minimise design risk, the company has picked the standard model to be developed outside China, and the phone is expected to make its debut in global markets in the second half of 2025.

Last week, Taiwan’s Wistron granted approval for the sale of its 100 percent indirect stake in Wistron InfoComm Manufacturing to Tata Electronics, for approximately $125 million (roughly Rs. 1,040 crore). Tata’s acquisition of Wistron’s production lines will make it the first Indian firm to assemble Apple’s iPhone models in the country.

Kuo points out that the iPhone maker’s move to make Tata one of its smartphone assemblers in India could help bolster the company’s relationship with the government of India, and is “critical” to the company’s growth over the next 10 years, according to Kuo. Tata will join Pegatron and Foxconn in producing currently supported iPhone units in the country.

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Tata Set to Become First Indian iPhone Maker in India as It Acquires Winston Unit

iPhones will soon be made in India by an Indian company, as Tata has acquired the Wistron unit to become the first Indian iPhone maker. Wistron, the Taiwan-based contract manufacturer for Apple, has decided to sell a 100 percent stake in the Wistron InfoComm Manufacturing (India) unit to Tata Electronics for a deal price of $125 million (nearly Rs. 1,040 crores). With the new takeover, Tata will set itself as the first-ever iPhone maker in India. Both companies reached this decision after Wistron approved the deal post its board meeting on October 27. 

Rajeev Chandrashekhar, the Union Minister of State for Electronics and Technology, has also confirmed the development with his post on X. Under Prime Minister Narendra Modi’s PLI scheme, Tata Group will begin making iPhones in India within the next two and a half years. These Apple devices will be up for sale in both domestic as well as global markets. 

He also shared a press release along with his post, which mentioned that Wistron has “granted approval to its subsidiaries, SMS InfoComm (Singapore) and Wistron Hong Kong Limited, to sign the share purchase agreement with Tata Electronics Private Limited (TEPL).” Once both parties sign the relevant agreements, the deal will move towards the next step of clearing further approvals. 

Tata has been in talks over the takeover of the Wistron unit for some time now. In July, it was reported that the conglomerate was close to acquiring Wistron by August. However, there has been a delay of a few months in the plan. As per the report, Tata will engage in the assembling of iPhones in India at the Wistron unit that currently operates an iPhone assembly plant near Bengaluru. 

The company has also been previously reported to be planning to open 100 stores across the country that will only sell Apple products. Apart from the recent takeover, Apple iPhones are assembled in India by two global suppliers – Foxconn and Pegatron — in Tamil Nadu. In fact, this year, India started selling ‘assembled in India’ iPhone 15 models on launch day for the first time. 

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Bharti Airtel Defers Payment of AGR Dues Up to FY19 After DoT’s Moratorium Offer

Telecom operator Bharti Airtel on Thursday said it has opted to defer the payment of AGR dues up to FY 2018-19, that are not tabulated in the Supreme Court’s order, by up to four years.

It has retained the right to pre-pay instalment amounts and would not avail the option of conversion of the interest dues that would accrue into equity.

Sources at the company said the amount of dues add up to about Rs. 3,000 crore for the additional years.

“We wish to inform you that the company has informed to DoT (Department of Telecom) that the company shall avail the option to defer the payment of the AGR (Adjusted Gross Revenue) dues up to FY 2018-19 which are not tabulated in the Hon’ble Supreme Court order, up to four years (applicable from FY 2021-22 to FY 2024-25) while retaining the right to pre-pay the instalment amounts,” Bharti Airtel said in a regulatory filing.

The company also made it clear that it will “not avail the option of conversion of the interest dues that accrue under aforesaid option into equity”.

Airtel said DoT had offered the option of four-year moratorium (applicable from FY 2021-22 to FY 2024-25) for AGR dues up to FY 2018-19 which are not tabulated in the Supreme Court order pertaining to statutory dues as well as for the conversion of the interest dues that accrue into equity.

The government calculates its share of revenue from telecom operators based on their AGR, which is considered to have been earned by them from the sale of services.

Last week, debt-ridden telecom operator Vodafone Idea (VIL) decided to defer payment of additional AGR dues of Rs. 8,837 crore by a period of four years.

In a filing on June 22, the company said DoT, on June 15, raised AGR demand for additional two financial years beyond 2016-17, which were not covered under the Supreme Court order on the statutory dues.

VIL had mentioned that its board of directors “has approved the exercise of the option of deferment of the AGR related dues by a period of four years with immediate effect, in accordance with the said DoT letter”.

“The amount of the AGR related dues as stated in the said DoT letter is Rs. 8,837 crore, which is subject to revision on account of disposal of various representations,” it had said.

Telecom service providers had got a shot in the arm with the government last year approving a blockbuster relief package that included a four-year break for companies from paying statutory dues, permission to share scarce airwaves, change in the definition of revenue on which levies are paid and 100 per cent foreign investment through the automatic route.

According to official data, telecom operators owe over Rs. 1.65 lakh crore to the government in adjusted gross revenue up to the financial year 2018-19.

The fresh calculation shows total AGR liability on Bharti Airtel is Rs. 31,280 crore, Vodafone Idea Rs. 59,230 crore, Tata Group Rs. 12,930 crore, Reliance Jio Rs. 630 crore, BSNL Rs. 16,220 crore and MTNL Rs 5,010 crore up to the financial year 2018-19.

Most of the telecom operators have made part payment of AGR demand raised till fiscal year 2016-17.

Bharti Airtel had an outstanding of Rs. 25,970 crore, VIL Rs. 50,400 crore, Tata Group companies Rs. 12,600 crore, BSNL Rs. 5,840 crore and MTNL Rs. 4,350 crore as on March 31, 2021.

The demand was also raised for some of the telecom companies like Sistema Shyam, Etisalat DB Telecom, S Tel, Reliance Communications that have shut down their telecom services business.

This week on Orbital, the Gadgets 360 podcast, we discuss iPhone 13, new iPad and iPad mini, and Apple Watch Series 7 — and what they mean to the Indian market. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

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