As reported by Reuters, Apple’s longstanding Taiwanese assembly partner, Foxconn, has secured the order to produce AirPods and will manufacture the headphones for the first time at its new factory, costing over $200 million to construct.
Previously, it was noted that Apple’s partner Jabil was producing AirPods components in India, which were then shipped to China and Vietnam for assembly.
By committing to building a new AirPods plant in India worth over $200 million, Foxconn aims to “reinforce engagement” with the tech giant and secure orders for new products. Foxconn is currently the largest iPhone assembler in Apple’s supply chain.
As the world’s biggest contract electronics manufacturer and assembler of around 70% of all iPhones, Foxconn will become an AirPod supplier for the first time. The new AirPod plant will be located in the southern Indian state of Telangana.
Officials debated for months about whether to assemble AirPods due to the relatively lower profit margins, but ultimately chose to proceed with the deal.
Apple is gradually diversifying its supply chain to reduce its dependence on China. The tech giant is focusing on India, in addition to Vietnam and Malaysia, as an alternative production hub. Apple began manufacturing the iPhone SE 2 for the local market in 2020 and opened its online store.
Apple now ships the iPhone 14 and iPhone 14 Plus out of India and plans to open its first Apple Store there this year. The company recently reshuffled management to designate India as its “own sales region”.
During the Q1 2023 earnings call, Apple CEO Tim Cook stated that the company sees India as an exciting market and considers it “a major focus”.
However, the report did not specify the size of Foxconn’s AirPods order or the models it would be manufacturing. Luxshare and Goertek are currently AirPods suppliers.