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Foxconn, the world’s largest contract electronics maker, has received 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.
Whereas a number of Chinese language suppliers at the moment manufacture AirPods, Foxconn officers have reportedly debated internally for months on whether or not to assemble AirPods, because of the comparatively decrease revenue margins.
Nonetheless, 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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In response to one of many sources, the choice to arrange manufacturing in India was made on the request of Apple.
Foxconn Interconnect Expertise Ltd., a Foxconn subsidiary, is anticipated 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.
Whereas 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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In the meantime, 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 among the firm’s company workforce.
Apple sometimes distributes bonuses and promotions a few times per yr, relying on the division. Nonetheless, nearly all of Apple’s divisions have already moved to a once-a-year schedule for bonuses and promotions, together with software program engineering and providers, whereas workers in operations, company retail, and different teams had nonetheless been on the outgoing biannual plan.
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