Tata Electronics Goes Beyond Apple: Building for Xiaomi and Oppo
Tata Electronics is currently in discussions with Xiaomi and Oppo to initiate contract manufacturing for the Chinese smartphone companies. This move is aimed at expanding their business beyond just supplying to Apple, according to sources familiar with the matter.
Recognizing the importance of scale in the electronics manufacturing services (EMS) ecosystem, Tata Electronics is focusing on increasing their production capacity. They have been engaging in negotiations with top Chinese smartphone manufacturers such as Xiaomi and Oppo to manufacture components for them. While talks with Vivo were also initiated, it seems unlikely that a partnership will materialize due to Vivo’s joint venture with Dixon.
Tata Electronics, known for producing enclosures for iPhones, is adopting a Foxconn-like model to enhance their value chain by manufacturing camera and display modules for smartphone companies. Despite attempts to reach out to Tata Electronics, Xiaomi, Vivo, and Oppo for comments, responses were not received by the time of publication.
Last month, Vivo and Dixon announced plans to establish a joint venture for manufacturing electronic devices, including smartphones. Dixon will hold a majority stake of 51% in the JV, with Vivo India owning the remaining 49%, as per regulatory filings.
Tata Electronics’ decision to diversify beyond Apple is expected to intensify competition with Dixon, a prominent player in the electronics manufacturing industry. Industry insiders believe that these companies may leverage Tata’s entry into the market to enhance their supply chain and negotiation power. As Dixon continues to grow, maintaining competitive pricing may become a challenge for manufacturers like Xiaomi.
Prabhu Ram, the head of the industry intelligence group at Cybermedia Research, described Tata Electronics’ strategy as an “audacious gambit” aimed at establishing itself as a key player in the global electronics supply chain. By expanding its portfolio beyond Apple to potentially include leading Android OEMs, Tata Electronics aims to achieve the scale and sophistication required by the contract manufacturing industry.
The capabilities developed through component manufacturing, such as camera and display modules, will not only enhance operational efficiency but also broaden the company’s technical expertise. Like Apple, Xiaomi heavily relies on contract manufacturers for smartphone assembly, with Bharat FIH, BYD, DBG Technology, Flextronics, and Padget Electronics (Dixon) being key partners in India.
According to CMR’s research, as of the end of 2024, Xiaomi (including POCO) held a 12% market share in India, while Vivo and Oppo held 17% and 11%, respectively. Oppo, despite having its manufacturing facility in Noida, is considering partnering with Tata Electronics to avoid scrutiny as a Chinese player.
Tata Electronics has been transparent about its ambitious plans, with Tata Sons Chairman N Chandrasekaran announcing the group’s intention to open nine new factories within the next 24 months and invest $18 billion in electronics and semiconductors. A recent report by the Economic Times indicated that Tata Electronics is in discussions with Microsoft, Dell, HP, and other large companies to expand its client base beyond Apple.
At the time, a source had revealed that although the company was currently busy with projects for Apple, it was eager to quickly implement this strategy.
Tata Electronics is now established as a reputable player in the industry. The original plan was to become an integrated EMS player, making it a natural progression to serve multiple clients. The ability to work with Apple has generated significant interest from other companies.
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