Foxconn's close cooperation with Apple was once a leader in the consumer electronics industry, however, behind this cooperation lies fierce competition and strategic change. Let's get into the story, after all.
At the beginning of the story, Foxconn is an internationally renowned electronic foundry company, with its excellent production capacity in Chinese mainland, successfully became the exclusive OEM of iPhone. But behind this seemingly tacit cooperation, Apple does not fully trust Foxconn.
In 2016, Foxconn dared to challenge Apple and oppose the reduction of OEM orders**. This move alarmed Apple, and they gradually began to seek a diversified chain strategy and no longer put all their eggs in one basket.
Apple quickly introduced new foundry factories, including Wistron, Pegatron, Luxshare Precision, etc., and gradually cut Foxconn's assembly contract orders. Then, they set their sights on the Indian market, which was also the moment of India's rapid rise.
India also has its own vision and is eager to develop its own manufacturing industry, so they have provided various preferential policies for Apple, attracting Apple and other first-chain manufacturers to invest in the construction of factories. Apple has joined hands with a number of first-chain companies, including Foxconn and Luxshare Precision, to launch a new round of production plans in India.
India's smartphone manufacturing industry, especially the OEM market, is also booming. According to the data, India's mobile phone shipments have exceeded 200 million units in 2022, making it the second largest smartphone shipment destination after China. India's Commerce Minister announced that 5% of iPhones are already made in India, while Apple plans to produce Rs 1 trillion worth of iPhones in India by the first quarter of 2024.
However, the Indian market is highly competitive, with not only the international giant Apple, but also the local giant Tata Group. Tata Group, founded in 1868, is India's largest group of companies, headquartered in Mumbai, covering seven sectors including communications and information technology, engineering, materials, energy, etc., operating hundreds of companies, with abundant capital and home advantage.
Tata Group not only acquired Wistron's mobile phone assembly foundry in India, but also offered to double salaries to retain Wistron's management. They are also in discussions with Pegatron to acquire Pegatron's mobile phone assembly OEM division in India. What surprised Foxconn the most was that the Tata Group also proposed a salary increase of up to 20% in an attempt to poach Foxconn's technical talent. Although the technological level and development are relatively backward, the Tata Group has used its financial strength in the Indian market to launch a war for talent.
To sum up, Foxconn's ambitions in the Indian market seem to have been "hunted" by the Tata Group. Mr. Gou faced the challenge of building a new production base in India and grabbing more orders from Apple, but now the competitive pressure is intensifying and the outlook is uncertain.
This story teaches us that the business world is always full of uncertainties, and even industry giants are constantly adjusting their strategies in the face of competition. The tortuous partnership between Foxconn and Apple, as well as the rise of the Indian market, is one of the endless stories of the business world, and we'll see what the future holds.