(Photo : Apple)
iPhone

• Tata Electronics is set to acquire a majority stake in Pegatron's only iPhone plant in India, forming a new joint venture.
• Tata will hold a 60% stake and manage daily operations, while Pegatron will retain 40% and provide technical support.
• This acquisition bolsters Tata's iPhone manufacturing plans, as Apple seeks to diversify its supply chain beyond China.
• The deal underscores the growing importance of India in the global smartphone market and strengthens Tata's position as an Apple supplier.

In a significant development, Tata Electronics, one of India's largest conglomerates, has agreed to acquire a majority stake in Pegatron's only iPhone plant in India. This move forms a new joint venture between the two companies, according to two anonymous sources. The deal, announced internally last week, will see Tata holding a 60% stake and managing daily operations of the joint venture. Pegatron will retain the remaining 40% and provide technical support.

The financial details of the deal have not been disclosed. Tata declined to comment on the matter, and Apple and Pegatron did not respond to queries regarding the deal. This development comes after Reuters first reported in April that Pegatron, backed by Apple, was in advanced talks to sell its only iPhone plant in India to Tata. This marks a significant scale back of Pegatron's partnership with Apple.

The deal's closure was announced internally at the iPhone plant on Friday, according to one of the sources. The two companies are expected to file for approval from the Competition Commission of India (CCI) in the coming days.

Tata's Strategic Move

This acquisition is a strategic move for Tata, which has been rapidly expanding into iPhone manufacturing, rivaling Foxconn, the only other iPhone contract manufacturer operating in India. The Chennai Pegatron plant will bolster Tata's iPhone manufacturing plans, especially as Apple is looking to diversify its supply chain beyond China amid geopolitical tensions between Beijing and Washington.

Tata already operates an iPhone assembly plant in the southern state of Karnataka, which it took over from Taiwan's Wistron last year. It is also constructing another plant in Hosur, Tamil Nadu, where it has an iPhone component plant that was involved in a fire incident in September. The Pegatron plant, which employs around 10,000 people and produces 5 million iPhones annually, will be Tata's third iPhone factory in India.

Analysts estimate that India will contribute 20-25% of total iPhone shipments this year, up from 12-14% last year. This increase is a testament to the growing importance of India in the global iPhone supply chain and the strategic role that Tata is playing in this shift.

Historical Context and Conclusion

Historically, such strategic acquisitions have been a common practice among large conglomerates to strengthen their position in the market and diversify their operations. For instance, in 2013, Microsoft acquired Nokia's Devices and Services division to bolster its position in the smartphone market. Similarly, in 2014, Facebook acquired WhatsApp to expand its user base and diversify its product offerings.