Apple Urges Chinese AirPods Supplier to Expand and Challenge Foxconn for iPhone Assembly

[MacRumors]

Apple has reportedly advised its Chinese AirPods assembler Luxshare to make a major investment in Catcher Technology, a Taiwanese firm that makes the metal casing for iPhone and MacBooks.

According to sources who spoke to Nikkei Asian Review, Apple hopes the move will create a "formidable" alternative to its longtime supplier, Taiwan's Foxconn.

Luxshare-ICT, a fast-rising Chinese tech company known for its aggressive growth strategy, has been in talks with Catcher Technology, the world's second-largest metal casing provider, for more than a year and has recently entered a deeper round of negotiations, said one of the people who is familiar with the situation.

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 said to be keen to reduce its reliance on Foxconn, which has accounted for more than 50 percent of iPhone production since Apple launched the device in 2007. Diversifying the Cupertino giant's assembly supply chain would also make it less vulnerable to local economic instabilities and allow it to negotiate better prices with manufacturers.

Apple is continually seeking to broaden its supply options around the globe, and has even gone so far as to invest its own money in companies to keep them afloat. One recent example is its multi-million bailout provision for LCD panel maker Japan Display, which Apple wants to see become a future OLED panel supplier and thereby reduce its reliance on Samsung.

Whether Catcher goes through with any deal remains to be seen. While such a situation would be a win-win for Apple, the benefits to suppliers are less clear-cut as they are likely to shoulder more of the risk of such an investment if consumer demand sours amid the global economic downturn linked to the ongoing health crisis.

Article Link: Apple Urges Chinese AirPods Supplier to Expand and Challenge Foxconn for iPhone Assembly

 

[uther]

Yes please! Let’s keep making Chinese manufacturing stronker. /s

Apple’s hypocrisy on human rights and democracy is getting sickening.

 

[whlee75]

Translation：folks please fight it out so I can reap more benefits

 

[I7guy]

Now this may be good for Apple, but why would they risk a “fight” with Foxconn?

 

[ArtOfWarfare]

I thought Foxconn was also a Chinese company, and that Apple wanted to reduce their dependence on Chinese companies?

Edit: Responses have corrected me - Foxconn is Taiwanese, not Chinese. I guess that makes things even worse, as far as diversifying to be less reliant on China.

 

[swingerofbirch]

Just reminds me of when I did customer support for Apple.

I think they had about 12 companies contracted out to do it (plus their own internal customer support—those were the employees treated nicely).

They had the companies fight over dog scraps. The company could lose the contract at a moment's notice, which we were constantly reminded of and did in fact happen at one of the companies I worked for (I did this as a gig at two different contractors). And actually I didn't even work for the contractor. I "provided work," meaning I worked for myself (same situation with Uber, etc).

Maybe Apple should use their money to build something, like have actual Apple-employed employees build actual physical objects (like manufacturing equipment and products), instead of lobbying Congress into letting them repatriate money they made overseas without paying full taxes on it or instead of all their share buybacks.

 

[MrGuder]

I’m starting to re consider my purchase of a China iPhone 12 this fall.
(6s user)

 

[44267547]

I’m confused, is ‘Luxshare Precision’ and ‘Luxshare-ICT’ as denoted in this article the same company or entirely different?

Reference article below on ‘Luxshare Precision for Apple Watch manufacturing:

Kuo: AirPods Pro, Apple Watch Series 6, and iPod Touch Getting New Suppliers in 2020

Apple will be making several changes to the suppliers of its products in 2020, according to reputable analyst Ming-Chi Kuo. For starters, Kuo...

www.macrumors.com

 

[rizzo41999]

I thought Foxconn was also a Chinese company, and that Apple wanted to reduce their dependence on Chinese companies?

Taiwanese

 

[nicho]

I thought Foxconn was also a Chinese company, and that Apple wanted to reduce their dependence on Chinese companies?

Perhaps the subtext is that Foxconn, not Apple, is pushing to move manufacturing out of China and pad it’s own profit margins a little in the process?

 

[MarkB786]

Great. Apple furthering its investments in China.

 

[szw-mapple fan]

I thought Foxconn was also a Chinese company, and that Apple wanted to reduce their dependence on Chinese companies?

Foxconn is Taiwanese.

 

[cocky jeremy]

Now this may be good for Apple, but why would they risk a “fight” with Foxconn?

More competition = lower prices for Apple

 

[Fender2112]

More competition = higher profits for Apple

Fixed that for you.

 

[repoman016]

I’m starting to re consider my purchase of a China iPhone 12 this fall.
(6s user)

dont want to burst your bubble, but your 6s was made in china too

 

[justperry]

Apple should actually think twice about investing more in China, should be less, I think though
after this crisis is over nothing has been learned and keep on going in the same direction.

 

[I7guy]

More competition = lower prices for Apple

Diversification of the supply chain is not a stupid idea. However, why do you want to risk a fight with your primary supplier was my original question and was this "news" supposed to be kept under wraps?

 

[pianoman88]

Just reminds me of when I did customer support for Apple.

I think they had about 12 companies contracted out to do it (plus their own internal customer support—those were the employees treated nicely).

They had the companies fight over dog scraps. The company could lose the contract at a moment's notice, which we were constantly reminded of and did in fact happen at one of the companies I worked for (I did this as a gig at two different contractors). And actually I didn't even work for the contractor. I "provided work," meaning I worked for myself (same situation with Uber, etc).

Maybe Apple should use their money to build something, like have actual Apple-employed employees build actual physical objects (like manufacturing equipment and products), instead of lobbying Congress into letting them repatriate money they made overseas without paying full taxes on it or instead of all their share buybacks.

Unbelievable. The last thing Apple should do is increase its dependence on China.

 

[kwikdeth]

More suppliers - more leaks

 

[MrGuder]

dont want to burst your bubble, but your 6s was made in china too

Fully aware of that...my phone is 5 yrs old and that money is dead and gone. I’m speaking of new money (iPhone 12) and future sales to benefit Apple and China partnership.

 

[ceriess]

Just reminds me of when I did customer support for Apple.

I think they had about 12 companies contracted out to do it (plus their own internal customer support—those were the employees treated nicely).

They had the companies fight over dog scraps. The company could lose the contract at a moment's notice, which we were constantly reminded of and did in fact happen at one of the companies I worked for (I did this as a gig at two different contractors). And actually I didn't even work for the contractor. I "provided work," meaning I worked for myself (same situation with Uber, etc).

Maybe Apple should use their money to build something, like have actual Apple-employed employees build actual physical objects (like manufacturing equipment and products), instead of lobbying Congress into letting them repatriate money they made overseas without paying full taxes on it or instead of all their share buybacks.

Well there. You seem to have a bead on how to make Apple an even stronger company than they already are. How the devil did you come up with this?! Who are you??!!!!

 

[citysnaps]

More competition = lower prices for Apple

And for Apple customers.

 

[swingerofbirch]

Well there. You seem to have a bead on how to make Apple an even stronger company than they already are. How the devil did you come up with this?! Who are you??!!!!

Not stronger. More worthwhile.

 

[mytdave]

Don't be stupid. Get out of China.

 

[incoherent_1]

People with common sense: “American companies clearly relied far too much on Chinese manufacturing, which created such an untenable situation after COVID. At least companies have now learned from their mistakes and will diversify supply chains away from China.”

Apple: “Hold my beer.”