The next iPhone will still be made in China, but Apple’s main assembler Foxconn will have to share the work, report says
- Foxconn may lose some iPhone 15 work to other Chinese manufacturers after it failed to deliver iPhone 14s last November due to Covid disruptions
- New arrangement marks the first time Apple has tapped three suppliers to produce premium iPhones, highlighting efforts to smooth the supply chain
Apple's next iPhone model will still be made in China by Foxconn Technology Group, but the company that operates the world’s largest iPhone factory in the central city of Zhengzhou will have to share the overall production with new suppliers, according to a Taiwan-based newspaper.
Luxshare, which was founded by a former Foxconn employee and has begun to assemble certain Apple products in recent years, is a major beneficiary for production of the iPhone 15 series, the report said.
Shenzhen-based Luxshare has won orders to make three of the four iPhone 15 models for the California-based tech giant, including the entry-level version and premium models like the iPhone 15 Plus, according to the report, which cited sources close to the suppliers.
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Apple is reportedly launching four models this year, including the iPhone 15, 15 Plus, 15 Pro and its priciest model – the 15 Pro Max or Ultra – that will be exclusively assembled by Foxconn.
It is the first time that Luxshare, which started out making cables for Apple and only began iPhone production in 2020 after it acquired two Chinese plants owned by Taiwan’s Wistron Corp, has been awarded manufacturing orders for three upcoming iPhone models in a given year. The move signals the mainland manufacturer’s rising clout in Apple’s China-based manufacturing supply chain.
Pegatron Corp, another major Taiwanese contract manufacturer for Apple that was the main supplier of the iPhone 14 Plus, will be responsible for a portion of the iPhone 15 Plus and 15 Pro models, the report added.
Foxconn and Luxshare did not immediately respond to requests for comment. Pegatron declined to comment.
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Pegatron may receive 20 to 25 per cent of orders for the iPhone 15 Pro, while Luxshare may win 20 to 30 per cent of iPhone 15 Pro Max production, according to Eddie Han, senior analyst at Taiwan-based consultancy Isaiah Research.
The arrangement marks the first time Apple has tapped three suppliers to produce its premium iPhone models, highlighting its efforts to mitigate potential supply chain disruptions by having backup suppliers. Analysts said the move could help other suppliers, including Luxshare, further erode Foxconn’s share of the Apple contract manufacturing value chain.
Han said Apple may have introduced a new rule for its supply chain to ensure that components and parts are provided by at least two suppliers to avoid potential risks associated with dependence on a single contract manufacturer.
Last November, a worker exodus triggered by China’s stringent Covid-19 controls and complaints over stipends upended Foxconn's operations in Zhengzhou, capital of central Henan province, leading to shipment delays for the iPhone 14 and subsequent moves by Apple to lessen its manufacturing dependence on China.
After the delays at Foxconn’s Zhengzhou plant, Luxshare was called upon by Apple to fill part of the production needs for the iPhone 14 Pro, which laid the groundwork for the company to win more orders for the new models to be released later this year.
“Our research indicates that iPhone 15 series allocation may be similar to the allocation [that went to Luxshare] after Foxconn’s pandemic [disruption] for the iPhone 14 series,” said Han of Isaiah Research.
But based on total volume, Foxconn will still produce the biggest quantity of the iPhone 15 series, the Economic Daily News report said.
