Apple supplier Wistron to set up new plant in Karnataka; more iPhone models may be assembled in India

The Taiwanese manufacturer already operates a facility in Bengaluru where iPhone SEs are assembled. The new plant in Kolar district is expected to create 6,000 jobs. 

Apple will soon be ‘making’ more in India.

The smartphone giant’s Taiwanese contract manufacturer Wistron, which has been assembling iPhone SEs in India since May 2017, has secured land for an extra assembly unit in the state of Karnataka. Reports suggest that the state government has approved Wistron’s application for a 43-acre land situated 65 km away from Bengaluru’s tech hub.

Wistron is said to be investing $105 million in the upcoming project that will create nearly 6,000 jobs. It would manufacture smartphones, IoT products and biotech devices out of the new facility at Narasapura Industrial Area in Karnataka’s Kolar district.

Wistron’s existing plant, where iPhone SEs are assembled, is at Peenya on the outskirts of Bengaluru. The company, which also manufacturers devices for other electronics brands, had been looking for 100 acres of land, according to a Reuters report. The Karnataka government, however, was not able to offer that immediately.

This expansion implies there could be more iPhone models assembled in India in the time to come. It could also mean that iPhone prices will drop by a few percentage points once they are truly ‘made’ in India and the custom duty burden on Apple is reduced.

Wistron’s land deal follows the Indian government’s announcement in the Union Budget that it would increase custom duties on mobile phones from 15 percent to 20 percent — a move that is expected to have a pronounced impact on Apple, which still imports a lion’s share of iPhone shipments from China.

Apple responded immediately by increasing prices of all iPhone models (except the iPhone SE) by more than two percent. Analysts, in fact, believe that iPhones could get costlier by three to four percent if local production doesn’t increase.

The iPhone-maker sources most of its sophisticated components like displays, camera modules, etc, from China. On the contrary, other foreign smartphone companies like Xiaomi, Oppo, Vivo, OnePlus, and Motorola manufacture 85 percent to 100 percent of their handsets in India.

Hence, they are able to offer value-for-money propositions to price-sensitive Indians who tilt more towards these devices. As a result, Apple’s share in the Indian smartphone market is a mere two percent, according to Counterpoint Research. In the premium segment too, it has been surpassed by China’s OnePlus, which is slowly turning into a cult brand in India.

So, Wistron’s new manufacturing unit augurs well for Apple and its customers.