Taiwanese manufacturer Foxconn supplies 70 per cent of the world's iPhones for Apple, and a bulk of it comes from its factory in China. After being hit by pandemic-induced disruptions in its supply chain, it decided to move a portion of its production from China, and is also diversifying its product portfolio.
Although Chinese firm Luxshare has been the main supplier of Airpods for Apple, Foxconn has won its first order for the wireless headphones.
Moving away from China, closer to Apple
Foxconn which already manufactures wearables and other devices such as iPad in Vietnam, will start supplying Airpods for the first time with this order.
To boost its diversification, Foxconn is reportedly investing $200 million in a factory in Telangana, although the Karnataka government has made claims about a similar unit near Bengaluru.
In the wireless headphone space, Foxconn has been making Beats, but has lagged behind Luxshare in terms of orders for Airpods.
Competitors to watch out for
Although Airpods have lower profit margins, the deal is Foxconn's way to increase engagement with Apple and compete with rival Luxshare.
Founded by a former Foxconn employee Wang Laichun, Luxshare also dominates Apple watch manufacturing and has bagged an order to make augmented reality devices as well.
Another Airpod supplier that Foxconn competes with, is China's Goertek, which was asked to suspend assembly of headphones late last year.
The order for Foxconn also comes months after reports that the firm had been told to move the manufacturing for Airpods and Beats to India.
