Apple's "Indian foundry" withdrew, Cook accepted the reality, did Foxconn also feel the chill?
Apple's sales market is very vast, and basically every country in the world has customers. In order to meet the market demand, Apple must find the right foundry.
Prior to this, most of Apple's orders came from our foundry, but in order to reduce their dependence on us, they decided to move the factory to the Indian side.
But now I've heard about Apple's"India Factory"is considering withdrawing, Cook has also chosen to accept the reality, and even Foxconn is trembling.
i.Indian smelters are not doing as well as they should.
Apple chose to hand over the order to the Chinese foundry, mainly because of China's abundant labor resources.
However, with the development of Apple and the increase in the number of orders, Apple has gradually realized that long-term dependence on our country does not seem to be reliable.
Coupled with China's labor force, Apple felt that its profit margins were being squeezed, and finally decided to change its development direction and hand over the order to India.
With Apple's massive moves, the Indian market sees hope for growth.
At that time, whether it was India's ** or Apple's helmsman, everyone was full of confidence, believing that as long as investment was increased and careful management, India would definitely become the next super factory, and the development speed could even exceed that of China.
The ideal is very plump, but the reality is very skinny. High hopes were placed on the Indian side of the plant, but the Indian side did not give a satisfactory answer.
Cook and other Apple executives mentioned the Indian foundry several times in the earnings conference some time ago, not praise, but criticism.
This is due to Wistron's withdrawal from the Indian side. Wistron is one of Apple's main foundries, which has a very large output and certainly makes a lot of money, but why did it make such a decision?
In fact, when Wistron first entered India, it was full of confidence – after all, the local labor resources are not expensive, and there is a good chance of making a lot of profits.
However, when they came to the Indian market, they found that the operating environment was poor, especially the profit margins were not high.
Wistron has been operating in India for about 6-7 years, and it stands to reason that it should be on the right track, but Wistron's annual profit is only 3% to 4% of total revenue, which is really a pitiful amount of profit.
If there is a problem with the company's internal operations, the situation will definitely improve with more attention and changes from the top.
But the problem is that Indian employees even violently damaged the company because of labor problems, and Wistron suffered huge losses as a result.
After this series of events, it can be said that Wistron is extremely disappointed with the Indian side, not only can it not make money by operating here, but it also has a disgraceful reputation, which is not worth it.
As a result, Wistron eventually sold its Indian factory to the Tata Group, making it clear to the public that the business environment in India was not good.
Second, what does Foxconn think?
Foxconn is a Chinese company, but it has a very close relationship with Apple, which places a large number of orders with Foxconn every year, and it can be said that Foxconn depends on Apple for its existence.
Perhaps because of this, with the encouragement of Apple, Foxconn has also invested heavily in building a factory in India.
But now even Wistron has decided to withdraw from the Indian market, which shows that the local activities in India are not going well. After this incident, our employees also very much wanted to know how the situation was at Foxconn and if they were experiencing the same problem.
Before Foxconn went to India to set up a factory, it also considered that it was developing the market and should be able to make a lot of money, but it didn't expect it to be so difficult to make money in India.
While the country claims to welcome foreign companies, it will let them as long as they come to this place"Eat and go"。
As long as the development of this foreign-funded enterprise is good and the situation is favorable, the Indian side will try by all means to take the money for itself, which is simply vulgar and shameless.
There may be many people who think that these foreign companies should take up the law to protect themselves, but the laws on the Indian side are definitely beneficial to their own country, and foreign companies can only suffer dumb losses.
Overall, the local business environment in India is indeed very bad, and the main problems that arise are: poor infrastructure, poor logistics, low quality of labor, and lack of reasonable laws and regulations. Faced with such a business environment, it is not surprising that Wistron chose to withdraw.
Although Foxconn has no intention of backing down, it is very difficult for India to develop locally. At the beginning, both Apple's headquarters and Foxconn were full of confidence and expectations in India, but now it seems that they are disappointed.
At a time when Apple is changing its industry, Apple's headquarters also feels that this is an opportunity for independent development and no longer depends on our country, and in the current situation, India has no chance to compare with our country.
But after all, Apple has already invested a lot of money in India, and now it has to continue to invest.