There are major changes taking place among the three contract manufacturers that assembled the Apple iPhone. Based in Taiwan, Foxconn assembles most iPhone units year after year. Last week we told you that Foxconn launched its annual rental drive that will result in the hiring of nearly one million people to manage the assembly lines that will be released by the 2020 5G iPhone 12 devices.
Apple iPhone assemblers want to relocate production from China
Back in July, we told you that Wistron, another contract manufacturer that assembles the iPhone for Apple in Taiwan, had sold the division that produces the device to a company called Luxshare. The latter will be the first company in mainland China to make Apple’s number one product. There are some advantages for Apple by doing some handset production on the mainland. In fact, factory workers make less money than they do in Taiwan. Through the move, Apple could also favor the Chinese government in Beijing; this should not be overlooked with the US and China still in the loop and with the Trump administration willing to step down Chinese tech from the US
Apple iPhone 12 render shows the iPhone 4 flat design that is back with the new models
The third iPhone assembler, also based in Taiwan, is Pegatron. According to Bloomberg, Pegatron buys the rest of iPhone case maker Casetek that it does not have. It will then follow by taking the unit audience to raise $ 1 billion. But the purchase of Casetek is actually a strategic purchase for Pegatron. Both the latter and Foxconn are thought to be concerned about Luxshare’s acquisition of Wistron’s iPhone production unit. Jeff Pu, an analyst at GF Securities, said, “Pegatron is trying to support its component company to defend itself against the rise of Luxshare. It could streamline some overlapping business with Casetek.” Pegatron seems to be feeling threatened by Luxshare’s acquisition of Wistron’s iPhone production unit. But as it turns out, Pegatron owns 0.57% of Luxshare, leaving the possibility open that the two could sometimes work together in the future.
Foxconn plans to follow Pegatron’s strategy by encouraging its component company to fight competitors. Foxconn chairman Young Liu said during a call in the quarter last week that the company was moving production capacity from China to Southeast Asia and other markets to avoid tariffs on exports to the US. The executive said: “It does not matter if it is India, Southeast Asia or the Americas, there will be any ecosystem of production.” Liu told investors that although China will still be a major production area as far as Foxconn is concerned, it “days when the factory of the world is done.” Last year, he said that if the trade war required Foxconn to move iPhone production out of China if necessary. The company has produced some iPhone models in India through Wistron and Foxconn.
Because the iPhone is considered a luxury device in India, older models were assembled in the country — that is, until now. Last month, Foxconn began making the composition iPhone 11 in India makes it the first time a current iPhone model was shipped out of the country. The iPhone units collected in India are not subject to tariffs imposed on Chinese exports to the US by the Trump administration. Locally produced, they are not subject to India’s 22% tax on devices imported into the country. And they qualify for the Make in India program which allows Indian manufacturers to sell their products anywhere as long as they are made in India.
This little shakeup should have no effect on the 5G 2020 iPhone 12 family. The latest rumor has it that a few weeks later than usual will be released due to the pandemic. The iPhone 12 and iPhone 12 Max are expected to pre-order on October 2 and ship exactly one week later. The iPhone 12 Pro and iPhone 12 Pro Max could be ready for pre-orders on October 16th and ship on October 23rd.
