iPhone India factory riots! Nearly 2,000 people smashed, looted and burned, employees said it was because of salary cuts

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An iPhone factory in India was smashed.

On December 12, the Times of India reported that an iPhone manufacturing factory located in Narsapura, India (approximately 60 kilometers from Bangalore) was smashed and vandalized on Saturday.

The factory is operated by Wistron, a contract manufacturer from Taiwan.

However, there are different opinions about the reason for the smashing; Indian media believe that the employees were protesting because they were dissatisfied with their salaries, but Wistron believes that it was a violent crime.

In any case, this is not good news for Apple's business in India.

iPhone factory was smashed because of salary issue?

According to the Times of India, those involved in the smashing and looting were Indian employees of Wistron - Wistron currently has about 2,000 employees, most of whom were involved in this incident.

Reports said the employees started smashing things after completing their night shift on Saturday.

Judging from a video shot at the scene, these vandals smashed the factory's doors, windows, furniture, glass and items, destroyed the managers' offices, and pushed over cars and tried to burn them... The people at the scene were shouting and destroying things, and the whole scene was a mess.

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So why do these people do this?

According to the Times of India, citing people familiar with the matter, the employees did this because of their salary issues - specifically, they were angry because the company failed to pay the amount promised when they joined the company, which led to this action.

According to a complaint filed by an employee to The Times of India, an engineering graduate was promised a salary of 21,000 rupees (1,864 yuan), but ended up getting 16,000 rupees (1,420 yuan), which was reduced to 12,000 rupees (1,065 yuan) in recent months.

The employee also said that if he (she) is a non-engineering graduate, his (her) monthly salary has been reduced to 8,000 rupees (about 710 yuan). The promised salary amount continues to decline, which is very frustrating.

What's worse, the employee claimed that on Friday night, when employees were discussing company issues, someone claimed that only 500 rupees (about 44 yuan) in wages had arrived in their bank accounts.

Ultimately, the outrage turned into violence on Saturday morning.

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According to the latest reports, local Indian police have rushed to the scene to maintain order.

Wistron: It was not an employee riot, but a criminal act

However, Wistron has a different statement regarding the report in The Times of India.

According to China Times News, Wistron clarified the above-mentioned violent behavior on the same day, stating that this was not a strike but a criminal incident. Wistron also stated that the long-term poor local security made the new factory a target for criminals, and that the people outside who ran into the company to cause trouble were not employees.

Regarding the losses caused by the smashing, Wistron stated that only some offices were damaged, and the main production line and warehouse were not damaged.

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According to another Taiwanese media outlet citing people familiar with the matter, Wistron has commissioned a total of five local labor companies to help Wistron find and hire workers, and Wistron will allocate funds to the labor companies every month according to the promised salary conditions.

Therefore, the person said that the Indian media's statement did not match the facts and it should be a dispute between the labor company and the workers.

It is worth mentioning that a senior Taiwanese businessman who has been doing business in India for a long time said in response to this matter that foreign-funded enterprises in India often collude with outsiders. From Indian executives to Indian managers, they have colluded with outsiders (sometimes even Indian officials) to create incidents and then extorted money from the companies for their own benefit.

Therefore, a local Indian insider said that the inside story of this matter is not simple and needs further investigation.

Leifeng.com learned that previously, Wistron promised to invest 29 billion rupees in the Narsapura Industrial Zone in India, planning to provide employment opportunities for 10,000 people, and thus obtained 43 acres of land allocated by the Indian government.

The factory that was smashed was mainly responsible for the production of Apple iPhone SE smartphones, as well as some IoT devices and biotechnology equipment.

Will Apple's development in India go smoothly?

At present, Apple has not made any statement regarding this smashing incident - but it reminds people of the twists and turns in the development of Apple's iPhone business in the Indian market.

Like many mobile phone companies, Apple iPhone had to comply with the Indian government's "Make in India" policy and produce its products in India when entering the Indian market. At the same time, as Apple's OEM factories, Foxconn and Wistron also opened factories in India.

It is understood that Apple started its local manufacturing journey in India in 2017, and the first iPhone model made in India was the original iPhone SE.

In 2018, Apple began producing iPhone 6s in India; in 2019, it began producing iPhone 7 and iPhone XR in India - it can be seen that although the models are constantly expanding, these are outdated or non-flagship models.

It was not until July 2020 that India's Minister of Communications and Technology Ravi Shankar Prasad officially announced that Apple had begun producing its flagship iPhone 11 in India. This was the first time that India had produced the latest iPhone model locally. The OEM factory for this model was Foxconn's factory in Chennai, India.

Leifeng.com (official account: Leifeng.com) learned that in August this year, Apple confirmed that its second-generation iPhone SE launched in the first half of this year was manufactured by Wistron's factory in Bangalore. This is also the latest iPhone model produced by Wistron in India.

As for the latest generation of iPhone 12 series, it is still not manufactured in India.

Looking at the market performance, according to a report on India's high-end smartphone market share released by market research firm Counterpoint, iPhone's share of shipments in India's high-end smartphone market was nearly 45% in 2016, with a very obvious decline in 2017 and 2018, and a slight rebound in 2019 to 25%.

In terms of absolute numbers, iPhone shipments in India in 2019 were only around 1.5 million units, less than one percent of iPhone's global shipments in the same year.

But there is good news: In September 2020, Apple India’s online store officially opened, which may promote the development of Apple’s business in the Indian market.

Questions for consideration:

Will the iPhone factory being smashed affect Apple’s business in India?