Taiwanese contract manufacturer Foxconn has received an order to make AirPods for Apple. It plans to build a $200 million factory in India to produce the wireless earphones, Reuters news report said.
Foxconn, the world’s largest contract electronics maker and assembler of 70 percent of all iPhones, will become an AirPod supplier for the first time, the report said. Apple AirPods are currently made by a range of Chinese suppliers.
Foxconn will invest more than $200 million in the new India AirPod plant in the southern Indian state of Telangana.
Foxconn Interconnect Technology plans to start construction of a manufacturing facility in Telangana in the second half of this year and begin production by the end of 2024 at the earliest.
Foxconn competes with Taiwanese rivals such as Wistron and Pegatron to win more orders from Apple.
Analysts have previously said Apple has asked suppliers including Foxconn to make AirPods in India.
Apple and its key suppliers have been shifting production away from China in the wake of strict COVID-19 curbs that had disrupted Foxconn’s biggest iPhone factory last year. They are seeking to avoid a hit to business from mounting Sino-U.S. trade friction.
Foxconn said on Wednesday it would enhance investment outside China to meet customer demand and lower its reliance on China for production.
It was not immediately clear whether Foxconn’s production plan would have impact on current AirPod suppliers, including Luxshare Precision Industry.
Goertek, another supplier, said in November an overseas client had asked it to suspend assembly work for a smart acoustic product, which analysts at the time identified as AirPods Pro 2, and the suspension would hit revenue by up to 3.3 billion yuan ($480 million).
Research firm Canalys in a report predicts that the smart personal audio market will drop by 5 percent in 2023, while TWS will decline by 2 percent to reach 281 million units.
Shipment of TWS, the category that had supported the smart personal audio market’s growth, dropped 23 percent to 79.5 million in Q4 2022.
Shipment of TWS from Apple (including Beats) decreased by 30 percent to 28.4 million in Q4 2022 because shipments were strong in Q4 2021 after the third-generation AirPods had a delayed release.
The second-generation AirPods Pro helped Apple retain its lead, contributing to 63 percent of all AirPods’ TWS shipments, Canalys said.
In 2022, Shipment of TWS from Apple dropped 1 percent to 91.4 million, accounting for 31.8 percent share vs 31.7 percent in 2021.