As the leader of the global smartphone market, Apple has a strong ability to attract money, and even Samsung, which ranks first in sales for many years, cannot compare with it. Apple alone accounts for 83% of the profits of the mobile phone industry, so many companies are competing to enter Apple's ** chain. It was through the partnership with Apple that Foxconn became confident and relocated its production line to India. However, Foxconn's founder, Terry Gou, did not expect that India would change so quickly!Although Foxconn has received more orders from Apple, the quality of its employees and labor conditions in India have surprised them.
Foxconn's rapid growth is not only supported by more Apple orders, but also thanks to its factory construction in Chinese mainland. Chinese mainland has provided reform and opening up dividends and various preferential policies, such as low-cost land and tax exemptions. More importantly, Chinese mainland has a large number of high-quality and cheap labor, and it is they who support Foxconn's rapid development. However, Gou did not admit this, and has publicly said that Foxconn is "giving food to Chinese mainland" and believes that it has created jobs for China. Foxconn does provide a large number of jobs in China, but it is a mutually reinforcing process, also because the Chinese employees are highly qualified and able to take on the pressure of Apple's orders.
In recent years, Foxconn has decided to relocate its production lines to India, partly to meet Apple's needs, but also to look at India's cheaper labor. Since Foxconn is in a labor-intensive business, they prefer to use low-cost labor. However, the quality of India's workforce is far from comparable to that of China, where the level of education is generally low, and many people have not even graduated from junior high school. Because of this, Foxconn's Indian factory has frequent accidents such as strikes, fights, and fires, resulting in Foxconn being unable to fulfill Apple's orders on time and can only transfer orders to Chinese factories.
Despite the losses suffered by Foxconn in India, they decided to continue to expand their assembly capacity in India. In August this year, Foxconn invested 3$500 million to build a new plant in India, and more recently $11 billion to build a new plant. Foxconn is doing this to increase the production capacity and level of iPhones in India in order to continue to work closely with Apple. Apple's determination to relocate its industrial chain is great, and Foxconn has not flinched. According to Foxconn's plan, they will gradually relocate 300 billion production capacity from Chinese mainland to India and expand the number of Indian employees to 200,000. However, what Gou did not expect was that Foxconn gradually fell into the "trap" of India.
Wistron, a company that came to India before Foxconn, has announced that it will completely withdraw from the Indian market and sold the factory to the Indian company Tata. Wistron made this decision because it had gone through the arduous process of building a factory in India, which made it difficult to maintain profitabilityOn the other hand, they initially had to work with Indian companies and were eventually bought by Tata, India's largest conglomerate. As a result, the Tata Group represented Apple's local foundry in India and reaped huge benefits.
After the successful acquisition of the Wistron factory, according to the analysis of relevant people, they may next seek to acquire Apple's other Indian foundry, Pegatron factory. In this way, Tata Group will be able to take full control of Apple's local foundry in India and further upgrade its assembly plant in order to compete with Foxconn for more orders in the future. Foxconn is not currently recognized in India, and the Tata Group has seized the opportunity to offer a 20% increase in salary in an attempt to poach good talent from Foxconn's Indian factory. If the Tata Group succeeds in acquiring the Pegatron plant, then Foxconn is likely to be their next target. In India, foreign companies are often at risk of being acquired by local companies, and our mobile phone manufacturers such as Xiaomi are also under constant scrutiny when setting up factories in India, let alone assembly plants like Foxconn. India wants to turn foreign factories into local industries, and the semiconductor factory jointly built by Foxconn and Indian companies was also vetoed by India in July this year, putting Foxconn in an embarrassing situation.
Foxconn used to be the representative of Chinese mainland foundry, with huge production capacity and excellent workforce. However, when it came to entering the Indian market, Foxconn encountered many challenges. They didn't anticipate the gap in the quality of their staff in India, which led to frequent problems at the factory and failure to meet Apple orders on time. At the same time, the Tata Group is gradually gaining control of Apple's foundry in India, posing a potential competitor to Foxconn.
This story tells us that Foxconn should be more cautious when expanding its business, especially when entering new markets. They need to better understand the environment and conditions of the target market, as well as the quality of employees and labor conditions. In addition, they should seek to partner with local businesses for more local advantages and support. In this era of global competition, Foxconn not only needs to maintain a close cooperative relationship with Apple, but also needs to establish a good partnership with local enterprises to jointly cope with the fierce market competition.
Most importantly, Foxconn needs to remain innovative and differentiated. In the highly competitive smartphone market, Foxconn cannot rely on a single customer, Apple, but should actively look for new partners and market opportunities to achieve sustainable development. Only in this way can Foxconn be invincible in the fierce market competition.