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Pegatron is in advanced talks to hand over control of its only iPhone manufacturing facility in India to the Tata Group, said two sources with direct knowledge, marking the Taiwanese firm’s latest scale back of its Apple partnership.

Under the deal, which has received the backing of Apple, Tata plans to hold at least a 65 percent stake in a joint venture that will operate the Pegatron plant near Chennai city in the southern Indian state of Tamil Nadu, with the Taiwanese firm providing technical support and holding the rest, one of the sources said.

Tata, one the largest conglomerates in India, will operate the joint venture through its Tata Electronics unit, the second source said.

The Pegatron India factory has around 10,000 employees and makes 5 million iPhones annually. It is the last such facility operated by the firm after it forfeited control of an iPhone plant in China last year to rival Luxshare in a $290 million (roughly Rs. 2,415 crore) deal.

Tata and Pegatron did not respond to emailed requests for comments. Apple declined to comment. The sources did not share financial details of the ongoing negotiations.

Apple is increasingly looking to diversify its supply chain beyond China amid geopolitical tensions between Beijing and Washington. For India’s Tata, the Chennai Pegatron plant will bolster its iPhone manufacturing plans.

Tata already operates an iPhone assembly plant in the neighbouring southern state of Karnataka, which it took over from Taiwan’s Wistron last year, and is also building another in Hosur in Tamil Nadu, where Pegatron is likely to emerge as its joint venture partner.

Pegatron has for months also been building another iPhone factory at its Chennai campus, and the Tata deal talks include taking over that facility as well, the first source said.

The talks between Tata and Pegatron for the factory are expected to close in six months and will see all of the Pegatron India employees move to the joint venture entity, the first source added.

Apple’s iPhone contract manufacturers in India currently include Tata, Pegatron and Foxconn. Tata is key to Apple’s growing ambitions in India, which analysts estimate will contribute 20-25 percent of total iPhone shipments this year, from 12-14 percent last year.

The reasons for Pegatron’s gradual withdrawal from its Apple business, including in India, were not known. Last year, Pegatron said the China plant deal was done to raise capital to “optimise its business”.

© Thomson Reuters 2024

Sony has announced a limited period promotional offer on select older PlayStation 5 models in India. The “Summer Promo” offer will apply on the standard PS5, bringing a discount of up to Rs. 13,000 on the console. The discount, announced in the wake of the launch of the slimmer version of PS5 in India, will start on April 10. The disc edition of the standard PS5, which launched in India in February 2021, is currently priced at Rs. 54,990.

The “Summer Promo” offer will only cover the disc version of the standard PS5 with model number CFI -1208A01R. The offer starts April 10 and will be active till April 30, or till stocks of the console model last. The standard PS5 will get a discount of up to Rs. 13,000. Sony India confirmed to Gadgets 360 that the discount will apply variably to applicable products and the offer will be valid on disc edition PS5 bundles, as well.

The discounts will be live on Amazon, Blinkit, Croma, Flipkart, Reliance, Sony Centre, Vijay Sales and other participating retails, Sony said. It’s also worth noting that the promotional offer will not include the Digital Edition of the older version console and the newly launched PS5 slim.

The slim version of the PS5, first announced in October last year, went on sale in India last week. The latest discount is likely aimed at clearing out stocks of the older model of the console.

The PS5 slim, which is thinner and lighter than the standard PS5, comes in at the same price of Rs. 54,990 for the disc edition and Rs. 44,990 for the digital edition. The new slim variant of the console is also available for 10-minute delivery in select cities in India via Blinkit.

The PS5 has sold over 50 million units since its launch in November 2020, but sales of the console have been slowing down, Sony confirmed at its quarterly earnings call earlier this year. The company had said it was set to miss its PS5 sales target for fiscal year 2023, expecting to sell four million units fewer than its 25-million goal for the year.

Tesla Inc. shares pared a steep drop in intraday trading after Chief Executive Officer Elon Musk denied a report saying the carmaker had called off plans for a less-expensive vehicle.

The stock fell as much as 6.2% on Friday after Reuters said Tesla had canceled the project, citing anonymous sources and company messages it had reviewed. Shares were down 1.3% as of 1 p.m. Friday in New York.

“Reuters is lying,” Musk wrote on X, without offering specifics. In another post, he responded with an eyes emoji to a Tesla investor who speculated that Tesla was shifting more resources toward trying to bring a robotaxi to market.

Musk first teased a $25,000 model during a battery-related event the company staged in September 2020. The CEO said at that time that a series of innovations Tesla was working on gave him confidence the company could make an electric vehicle at that price point within about three years.

Tesla’s failure to deliver the car on time is proving costly. This week, the company reported its first drop in quarterly vehicle deliveries in four years. It’s losing ground in China, where manufacturers led by BYD Co. offer a bevy of newer and cheaper EVs.

Musk’s biographer, Walter Isaacson, wrote in his book published in September that the billionaire had “repeatedly vetoed” plans to make a less-expensive model for two years after Battery Day. Isaacson wrote that Musk believed Tesla’s self-driving efforts would render the $25,000 car unnecessary.

Reuters reported Friday that Musk had issued a directive in late February to go all in on developing a robotaxi. The CEO has repeatedly claimed Tesla is on the verge of bringing a fully self-driving vehicle to market, but has yet to offer features that can safely be used without drivers keeping their eyes on the road and hands on the wheel.

During Tesla’s most recent earnings call, Musk said Tesla was “very far along” with work on its lower-cost vehicle.

“I’m often optimistic regarding time,” he said. “But our current shows that will start production toward the end of 2025.”

Tesla also has talked up a radical change in its manufacturing approach to reduce costs, including at an investor day hosted in March of last year. During the Jan. 24 earnings call, Musk referred to this as “far more advanced than any other automotive manufacturing system in the world by a significant margin.”

Read More: Tesla’s $25,000 Car Requires Breaking 100-Year-Old Factory Habit

Tesla has scheduled its next earnings release for April 23.

© 2024 Bloomberg L.P.

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