Apple allegedly shut down Tata's potential partnership with Vivo, claims report

The Tata Group has reportedly paused discussions to acquire a majority stake in Vivo’s Indian business, allegedly due to intervention by Apple.

Chinese smartphone manufacturer Vivo was looking to sell 51 per cent of its Indian subsidiary to Tata Group to comply with increasing Indian government pressures to make its operations more local. However, the deal now appears to be off the table, according to a Times of India report.

According to sources cited in the report, Apple did not want Tata Group to own a significant share in a competing company. The core issue lies in Tata’s ownership of a factory that is part of Apple’s supply chain in India. Had the Tata Group acquired a controlling stake in Vivo India’s business, it would have been a massive conflict of interest.

In 2023, Apple’s manufacturing partner Wistron sold its Karnataka factory to Tata Group for approximately $125 million, according to several media reports. Tata continued to use this facility to produce Apple products, including the iPhone. The factory still employs around 10,000 workers.

One source explained that Apple’s concern stemmed from the potential conflict of interest that would arise if Tata, a key manufacturing partner, entered into a substantial partnership with a competitor like Vivo.

For Apple, such a move by Tata would effectively mean aligning with a rival, which could compromise their strategic interests.

Although Apple Insider reports that Tata has denied any developments regarding the deal with Vivo, the incident highlights the intricate dynamics between major corporations and their strategic partnerships.

Apple’s alleged intervention suggests that the tech giant is keen on maintaining clear boundaries within its supply chain and avoiding any potential conflicts of interest that could arise from its partners’ business ventures.

Tata has been actively expanding its role within Apple’s supply chain since acquiring the Wistron facility. In April, the conglomerate was reportedly close to securing a controlling stake in a Pegatron facility in Tamil Nadu, India, further solidifying its position as a key player in Apple’s manufacturing ecosystem.

Given the importance of its strategic partnership with Apple, it is obvious why Tata probably gave up on the idea of acquiring Vivo India. With Apple, Tata gets to export a major chunk of the iPhones that it produces to international markets, which directly ties in with the Tata Group’s ambitions to become a major tech exporter and a global destination for electronics and precision manufacturing.

Situations like these represent the complexities faced by multinational companies in navigating their business interests and partnerships. As Tata Group continues to grow its presence in the tech manufacturing sector, it will have to strike a delicate balance between expanding its business and maintaining critical alliances like the one with Apple if it is seriously contemplating of competing on a global scale .