Taiwanese maker Foxconn has won an order to produce AirPods headphones for Apple and plans to build a factory in India to produce the wireless headphones, two sources with direct knowledge of the matter told Reuters.
The deal will make Foxconn, the world’s largest maker of third-party electronics and responsible for approximately 70% of all iPhones, a first-time supplier of AirPods and underscores efforts to further diversify manufacturing overseas, from China.
Currently, the headphones are manufactured by several Chinese suppliers.
A source said that Foxconn will invest more than $200 million in the new AirPods factory in the southern Indian state of Telangana. It wasn’t immediately clear how much the headphones had been ordered to produce.
The source, who requested anonymity because the matter was not yet public, said Foxconn employees had been discussing the assembly of the wireless headphones internally for months due to relatively low profit margins in manufacturing the device, but ultimately they agreed to go ahead with the deal. to “strengthen engagement” with Apple.
The decision to start production in India was prompted by Apple, according to the source.
A subsidiary, Foxconn Interconnect Technology, plans to begin construction of a plant in Telangana in the second half of this year and begin production by the end of 2024, the source said.
Shares of unit Foxconn jumped nearly 9% after Reuters first reported the news, reversing an earlier 2.2% loss. Foxconn’s own shares rose 0.5%, while the Taipei benchmark fell 1.1%.
A second source with direct knowledge of the matter, who also declined to be identified because the matter was not yet public, said the Foxconn subsidiary will manufacture AirPods in India, without providing further details.
Analysts have previously said Apple has asked suppliers, including Foxconn, to produce AirPods in India, but details such as the size of the investment, timelines and which suppliers are planning to produce in the country have not been disclosed.
Source: Terra
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