Wistron’s stumble may help other Apple contractors see unexpectedly windfall in India: Report

Wistron's Kolar manufacturing plant (Image: Reuters)

Wistron’s misstep may give rivals Pegatron and Foxconn the chance to expand their market share as Apple’s prime manufacturer for iPhones in India.

With Wistron out of commission for Apple in India – even if for a little while – other contractors such as Pegatron and Foxconn may “unexpectedly” stand to gain, Mint reported. More worrying for Wistron is that it sold a part of its China business to augment its India one, it added.

Foxconn is considering expanding its Chennai (Tamil Nadu) plant – where it makes the iPhone XR and iPhone 11, and Chairman Liu Young-Way said it is “pushing ahead” and will invest more in India.

And, in November, Pegatron’s board approved Rs 1,100 crore “long term investment” in India after incorporating its Indian subsidiary in July. Pegatron is also among the smartphone makers that received approval under the Centre’s new production linked incentive (PLI) scheme.

One source told the paper that the Wistron incident has made global headlines and China has used this as a cautionary tale for those looking to shift base to India.

Moneycontrol could not independently verify the report.

The source added: “It was easy for Wistron to find a fall guy, but there is a lack of clarity in the steps Wistron will initiate from Taiwan to restructure teams following the incident. No one knows what the restructuring would look like, and only then can the company start planning for its future in India.”

Others however say, redistributing orders to other makers will not be a simple task for Apple as each contractor makes different models – which each require specific advanced parts and companies have heavily invested in setting up the infrastructure, the report added.

Notably however, the companies could have an advantage in snagging opportunities beyond Apple – especially since India’s Android market is much larger than its Apple one.

Apple, Foxconn, Pegatron and Wistron did not respond to queries, as per the report.

Apple on December 19 announced it has put the Taiwanese contractor on probation while it investigates the issues which occurred at the supplier’s Narasapura facility. In a statement, it said that it has hired independent auditors, who along with Apple employees, are “working around the clock to investigate the issue.”

Apple found Wistron flouting the company’s Supplier Code of Conduct by failing to implement proper working hour management processes – which led to payment delays for some workers in October and November. The statement added that Wistron will not receive new business till corrective measures are implemented.

In a bid to salvage the situation, Wistron on December 19 said they “recognise their mistake” and are “taking immediate action to correct this," including the removal of India vice president Vincent Lee.