Foxconn, the world’s largest contract electronics maker, has gained an order from Apple to fabricate AirPods, reported Reuters citing two sources. The Taiwan-based firm plans to construct a manufacturing unit in India to supply the true wi-fi stereo (TWS) earbuds. This deal marks Foxconn’s entry into the AirPods provide chain and highlights its efforts to diversify manufacturing away from China.
While a number of Chinese suppliers presently manufacture AirPods, Foxconn officers have reportedly debated internally for months on whether or not to assemble AirPods, because of the comparatively decrease revenue margins.
However, the corporate in the end determined to proceed with the deal to strengthen its relationship with Apple and to be extra prone to safe orders for Apple’s new merchandise.
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According to one of many sources, the choice to arrange manufacturing in India was made on the request of Apple.
Foxconn Interconnect Technology Ltd., a Foxconn subsidiary, is predicted to take a position greater than $200 million within the new India AirPods plant in Telangana and plans to start manufacturing by the top of 2024 on the earliest.
While Apple and its suppliers have been shifting manufacturing away from China, the place the coronavirus-induced pandemic disrupted Foxconn’s largest iPhone manufacturing unit final yr, it’s unclear whether or not Foxconn’s manufacturing plan will have an effect on present AirPod suppliers. Apple and Foxconn reportedly declined to touch upon the matter.
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Meanwhile, Apple is reportedly delaying bonuses for some company divisions and intensifying its cost-cutting efforts as the corporate goals to streamline operations. The transfer will reportedly cut back the frequency of bonuses for a few of the firm’s company workforce.
Apple usually distributes bonuses and promotions a couple of times per yr, relying on the division. However, the vast majority of Apple’s divisions have already moved to a once-a-year schedule for bonuses and promotions, together with software program engineering and companies, whereas workers in operations, company retail, and different teams had nonetheless been on the outgoing biannual plan.