The Indian conglomerate Tata Group, already a player in Apple’s iPhone manufacturing game, might be taking a bigger bite of the apple. According to industry reports, Tata is discussing acquiring Pegatron’s sole iPhone manufacturing facility near Chennai, India.
This move, if successful, would solidify Tata’s position as a key player in Apple’s iPhone supply chain within India. The deal is rumored to involve Tata holding a majority stake (at least 65%) in a joint venture that would operate the Pegatron plant. Pegatron, in turn, would likely offer technical expertise while holding a minority stake.
The deal reportedly has Apple’s backing, signifying the importance the tech giant places on India’s growing smartphone market. Analysts predict India could contribute a significant portion, estimated at 20-25% of Apple’s total iPhone shipments this year, compared to 12-14% last year.
Here’s a closer look at what this potential acquisition could mean:
- Boost for Tata: Acquiring Pegatron’s facility would significantly increase Tata’s iPhone production capacity in India. This aligns with India’s push for domestic manufacturing under initiatives like “Make in India.”
- Apple’s India Ambitions: Apple has been keen on expanding its footprint in India, the world’s second-largest smartphone market. Owning a majority stake in the manufacturing process could give Apple greater control over production and potentially reduce reliance on overseas facilities.
- Pegatron’s Shift: Pegatron has reportedly been scaling back its partnership with Apple for some time. This deal could be a way for Pegatron to exit the Indian market while ensuring a smooth transition for its workforce, as all employees are expected to be retained under the joint venture.
The deal is still under negotiation, with an expected closing timeline of around six months. If finalized, this acquisition would be a significant development in India’s journey towards becoming a global smartphone manufacturing hub, with Tata playing a leading role.
