India's largest conglomerate, the Tata Group, is nearing a landmark agreement to acquire an Apple Inc. supplier's factory in Karnataka as early as August. This pivotal move would establish Tata as the first local company to undertake the assembly of iPhones in India, marking a significant shift in the global technology supply chain. The acquisition, reportedly valued at over $600 million, will see Tata take over Wistron's operations, including its factory that currently employs more than 10,000 workers assembling the latest iPhone 14 models.

Upon completion, Tata is expected to not only enhance the existing iPhone production capacity but also reportedly conduct trials for the assembly of upcoming iPhone 15 models in India. Tata has committed to honoring Wistron's existing obligations, which include shipping $1.8 billion worth of iPhones from the factory in FY24 to secure state-backed financial incentives. Wistron, which began manufacturing iPhones in India approximately five years ago with the iPhone SE 2, currently produces models such as the iPhone SE, iPhone 12, iPhone 13, and iPhone 14 in the country, and reported exports of around $500 million in iPhones in the quarter ending June 30.

This strategic acquisition by Tata aligns with Apple's overarching goal of reducing its manufacturing dependence on China. The challenges posed by China's stringent COVID-related restrictions, which led to significant disruptions and an estimated cost of a billion dollars per week to Apple, underscored the urgent need for diversification. Furthermore, geopolitical tensions between Beijing and Washington have spurred Apple to explore alternative production hubs. While Foxconn Technology Group, one of Apple's primary contract manufacturers, remains a leader in iPhone assembly and is expected to produce the majority of the iPhone 15 series, followed by Pegatron and Luxshare, Tata is reportedly slated to assemble a smaller portion of the iPhone 15 and 15 Plus models.

India is emerging as a crucial new manufacturing market for Apple, with plans to significantly scale up local production. Reports last year suggested that a quarter of all iPhones could be manufactured in India by 2025, potentially rising to half by 2027. This localization effort, especially with a domestic company like Tata involved, could encourage other global electronics brands to consider establishing production facilities in India, further reducing reliance on China. The Tata Group, known for its diverse business ventures from salt to tech services, has been actively expanding into electronics production and e-commerce, already manufacturing the iPhone chassis at its Tamil Nadu factory and harboring ambitions in semiconductor manufacturing, as stated by Chairman N Chandrasekaran.

Regarding the upcoming iPhone 15 series, Apple is anticipated to launch four models, maintaining the same sizes as the iPhone 14 lineup: two 6.1-inch iPhones and two 6.7-inch iPhones. This includes a standard iPhone 15, an iPhone 15 “Plus,” and higher-end “Pro” models in both size categories. Mass production for the iPhone 15 series is reportedly on track to commence in August, aiming to build approximately 84 million units for the second half of 2023.