Apple Encourages AirPods Assembler to Expand, Challenge Foxconn [Report]

Apple Encourages AirPods Assembler to Expand, Challenge Foxconn [Report]

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Apple is encouraging AirPods assembler Luxshare to expand its business and make a major investment in Catcher Technology, the world's second largest metal casing provider, reports Nikkei. This would create a rival to Foxconn, Apple's largest supplier.

The companies have been in talks for more than a year and recently entered a deeper round of negotiations.

The deal, if realized, would give Luxshare the ability to produce high-quality metal casing as well as access to smartphone assembly know-how, which would take it a step closer to becoming the Chinese version of Foxconn -- a single company with operations that span nearly the entire electronics supply chain. Such a move could ultimately help Luxshare grab a share of iPhone production, which ships around 200 million units each year.

"Apple is encouraging Luxshare to make the investment. The rationale is to raise a competitive Chinese assembler to counterbalance the Taiwanese assemblers," an executive-level source who is familiar with the ongoing talk said. "The more qualified suppliers Apple has, the more bargaining power it will own."

Included in the deal would be some of Catcher's facilities in China, its workforce, management employees, and contracts with Apple.

"For Apple, it is a win-win situation to support the growth of Luxshare," said a supply chain manager. "Not only do Chinese companies offer lower prices with competitive quality, but it would also help Apple further deepen its network in a market with 1.3 billion people."

More details in the full report linked below...

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Apple Encourages AirPods Assembler to Expand, Challenge Foxconn [Report]