Can this former Acer company help Apple’s losing streak in India?

Apple CEO, Tim CookFlickr

  • Wistron, formerly Acer's manufacturing arm, is a part of Apple's to locally manufacture iPhones in India.
  • Their project application has been forwarded by the IT ministry but is yet to be approved by India's cabinet.
  • Wistron is already assembles the iPhone SE and 6S in India.
Apple’s new lifeline to conquer emerging markets seems to be to set up local manufacturing. Wistron, one of Apple’s manufacturing partners, just had its ₹5,091 crore project application approved by the IT Ministry — but it yet to be greenlit by the cabinet.

“We have just approved Wistron’s Rs 5,091-crore application and it is with the Cabinet now… Wistron will make the latest iPhone models.”

IT minister Ravi Shankar Prasad said in an interview to ETTelecom

The company has already secured a 43-acre plot near Bengaluru to setup the new plant for the project.

Wistron isn’t the only company to ramp up local production in India. In December 2018, Foxconn — another manufacturing arm of Apple — also announced plans to locally manufacture ‘high-end’ iPhones in India.

For Apple, it’s a win on two fronts. One, it might be able to reduce the price of iPhones in the world’s second largest smartphone market. And two, widening assembly beyond China will help the company mitigate the risks of the US-China trade war.

Wistron’s India story

If you haven’t heard of Wistron, then you might have heard of Optiemus — popularly known as the company that makes Blackberry devices.

A joint-venture between the two made them the largest contract phone makers in India in 2016 — manufacturing phones for LG, OnePlus and HTC.

When it comes to Apple, Wistron is already assembling the iPhone SE and 6S in India. But, ‘assembling’ isn’t the same as making a phone from scratch. It’s one of the reasons that the iPhones are still expensive.

When you’re assembling a phone, you’re still importing all the parts — and thus, still subject to import duty. Manufacturing a phone in India itself could potentially reduce prices of iPhones by 40% foregoing the government tariffs.

The plan that Wistron put before the Indian government included the production of the iPhone XS, iPhone XS Max and the iPhone XR — Apple’s most recent iPhones.

But even taking the 40% surcharge out of the equation, the iPhone — the price of the iPhone XS Max begins at ₹109,900 and the cheapest of the three variants, the iPhone XR, costs at least ₹76,900.

Two years ago, adjusting the price of a smartphone might have been enough to win over the Indian market. But, it might not be enough to conquer the increase in competition with new players coming in.

And even consumers have evolved beyond price, something that Xiaomi, ASUS and Samsung are capitalizing on by bringing in higher specifications on budget devices.

Before it got into smartphone production, Wistron was exclusively Acer’s manufacturing arm. It only became its own entity in 2000.

See also:
‘Made-in-India’ Apple iPhones may get cheaper but they probably won’t be cheap enough for Indian users

This is why mobile phones in India will get even cheaper in 2019

Here's why Apple’s problem that began in China may spill over to India too
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