As Apple seeks to diversify its production and reduce dependence on China, The Wall Street Journal reports that the tech giant is increasingly leaning on Luxshare Precision, a Chinese firm known for its expertise in assembling Apple’s products.
Luxshare’s growing influence
Luxshare, led by Grace Wang, is responsible for manufacturing several Apple products, including AirPods, the Apple Watch, and the recently launched iPhone 15. The company is also set to assemble Apple’s first AR/VR headset, Vision Pro, slated for release next year. This growing partnership underscores the challenges Apple faces in shifting production from China to other countries like India and Vietnam.
During a recent visit to Luxshare’s Apple Watch factory near Shanghai, Apple CEO Tim Cook lauded the company’s work. He highlighted Luxshare’s commitment to environmental sustainability, noting the solar panels powering the facility.
Luxshare’s journey with Apple began modestly, initially taking orders Foxconn couldn’t fulfill. Over time, Luxshare has steadily encroached on Foxconn’s share of Apple’s business. Grace Wang’s leadership has been pivotal in this ascent. Starting her career at Foxconn, Wang later founded Luxshare, which initially focused on electric cords and TV set cases. The company’s relationship with Apple deepened after acquiring a firm that produced cables for Apple’s iPad.
Navigating the Apple-Luxshare partnership
Despite Apple’s challenges in China, including government directives against using iPhones and other foreign devices, the company still produces the majority of iPhones in the country. This reliance is partly due to Chinese CEOs like Wang, who excel at meeting Apple’s exacting standards.
Luxshare’s expansion hasn’t been limited to Apple. Wang has emphasized the need for diversification, with the company venturing into the electric vehicle supply chain. However, the bond between Apple and Luxshare continues to strengthen. Luxshare is now involved in the “new product introduction” for Apple’s 2024 high-end iPhones, a role previously dominated by Foxconn.
To support Apple’s global expansion efforts, Luxshare is investing in facilities in Vietnam and India. Wang has expressed ambitions for Vietnam to account for 30% of Luxshare’s total production without diminishing its presence in China. Additionally, Luxshare is gearing up to assemble a next-gen version of Apple’s virtual-reality headset, expected to enter mass production by 2027.
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