Pegatron and Wistron just got more competition as the iPhone maker Foxconn just won an order to make AirPods for Apple. The information comes from Reuters, which talked with two people familiar with the matter.
This is the first time Foxconn will assemble AirPods. The Taiwanese manufacturer is already responsible for assembling around 70% of all iPhones Apple makes, and it now wants to diversify its production as it also pushes away from China.
One of the sources told the publication that Foxconn would invest more than $200 million in the new India AirPods plant in the southern Indian state of Telangana. While AirPods offer low-profit margins, the manufacturer has reportedly bid on the contract in an effort to “reinforce engagement” with Apple.
The new plant in India will be constructed in the second half of the year, and Reuters‘ sources expect it to begin production by the end of 2024 at the earliest. That said, while Apple doesn’t plan to renew its AirPods line for 2023, Foxconn could be ready for new models of AirPods 4, AirPods Pro 3, and even AirPods Max 2 in the future.
This report comes at a time Foxconn has just said it expects lower demand for consumer electronic products in 2023, and the company is already generating profit in other areas such as cloud, networking, and computing.
In addition, getting this new order will help Foxconn diversify its supply chain away from China, as the manufacturer is also ramping up iPhone production in India. Currently, Foxconn is making a plant in Karnataka, which will employ up to 100,000 workers.
This factory will produce the latest iPhone models and could also assemble Apple’s upcoming Mixed Reality device.
Another AirPods maker, GoerTek, is one of the many manufacturers exploring locations beyond China. The company expects most Apple suppliers to do the same due to escalating tension between Beijing and Washington.