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Tata Electronics restarts iPhone facility after fire; hit to sales unlikely
Summary
- Tata Electronics' Hosur facility that makes iPhone cases caught fire last week.
Tata Electronics will resume most operations on Thursday in its Hosur facility that makes iPhone cases after a fire last week led to a shutdown, the company said in a statement, even as experts said the incident is unlikely to affect Apple's sales during the ongoing festive season.
“We plan to restart work in many areas of the facility today. And as we work toward resuming full operations, all our team members will continue to receive full pay," a Tata Electronics spokesperson said Thursday. “We’ve been working diligently since Saturday to support our team and to identify the cause of the fire at our Hosur facility."
Full operations are expected to begin in the coming weeks, people aware of the details told Mint, adding that investigations into the incident were ongoing at the state level.
Details of the fire, which broke out on Saturday in an area where chemicals were stored at the Tata Electronics factory, have been shared with the authorities from both the Centre and the state government even as production was halted and facility was shut down.
Also Read | Tamil Nadu authorities to begin forensic investigation for Tata Electronics plant fire incident
The incident is unlikely to have an impact on production volumes or Apple’s share in the premium segment during the festive season that started with Navratri on October 2. Industry executives and analysts said stocks of older iPhone models, which make the bulk of sales during the festive season, were adequate to take care of demand in the coming months.
Adequately stocked
“There is enough stock with distributors and retailers of the new models as well. Most of the production for the festive season demand takes place in the previous quarter," said an industry executive, asking not to be identified.
For the iPhone Pro models, which are manufactured in India, some maybe imported but their volume share is low and the price increase on these models due to import duties is not likely to deter buyers in the ₹50,000-60,000 upwards segment, the executive added. According to analysts, Apple imports only 5% of the phones that it sells in India.
“The necessary components for shipments during October will have gone two weeks before to the assembly partner, meaning there will not be any impact for the next month, at least till October end. There could be a shipment delay towards early November, but it also depends on how Apple plays the strategy in terms of whether the impact will be for domestic sales or exports," said Tarun Pathak, research director at Counterpoint Technology Market Research.
Also Read | Apple's Indian workforce expansion could see 6,00,000 jobs by fiscal year-end: Report
At present, Foxconn’s India facility produces 60-65% of the iPhone volumes in India and Tata Electronics makes the rest. Tata Electronics is the latest on the list of suppliers from India to which Apple is attempting to shift at least a quarter of its global production of iPhones over the next three to four years, Mint reported earlier this year.
The majority of Apple’s iPhone production takes place in China even as it sources components from more than 200 factories across the world.
With the latest iPhone 16 going up for sale, a record 3.3 million units were expected to be shipped from October to December. Mint reported last month that Apple could sell up to 13 million iPhones in India this fiscal year, generating upward of $11.5 billion in revenue from one of its fastest-growing markets.
