Taiwanese contract manufacturer Foxconn has won an order from Apple to manufacture AirPods and plans to construct a factory in India for the wireless earphones, according to two people familiar with the matter. The deal marks Foxconn’s first time as an AirPod supplier and demonstrates its efforts to diversify production beyond China, where the company assembles approximately 70% of all iPhones. AirPods are presently manufactured by several Chinese suppliers.
Foxconn will reportedly invest over $200 million in the new India AirPod plant, located in the southern Indian state of Telangana, according to one of the sources, who requested anonymity because the information was not public. It remains unclear how much the AirPod order will be worth.
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The source revealed that Foxconn executives internally deliberated for months about assembling AirPods due to relatively lower profit margins on the device, but eventually decided to proceed with the deal to “strengthen engagement” with Apple. “That way, we are more likely to get orders for their new products”, the person said.
The move to set up production in India was requested by Apple, according to the source. Foxconn competes with Taiwanese rivals Wistron Corp and Pegatron Corp to secure more orders from Apple, the world’s most valuable company.