Apple is advising Luxshare, a long-established partner in the supply chain, to expand its business. This could potentially cause a bit of friction between Apple and its iPhone supplier Foxconn.
Luxshare is in the midst of an investment deal with Catcher Technology, the world’s second-largest metal casing provider. Catcher is also a part of Apple’s iPhone, iPad, and Mac supply chain. As of now, Luxshare primarily makes Apple’s Airpods. However, according to a report from Nikkei, their business could expand.
Apple is encouraging Luxshare to close the deal. This would allow Luxshare to produce metal casings and get a step closer to smartphone assembly. Ultimately, solidifying the deal between Luxshare and Catcher would place them as a competitor to Foxconn.
The closing of this deal could allow Apple to diversify its supply chains and may lower costs. According to an executive-level source speaking to Nikkei: “Apple is encouraging Luxshare to make the investment. The rationale is to raise a competitive Chinese assembler to counterbalance the Taiwanese assemblers.”
Currently, Foxconn as claimed a major stake in the supply chain market. Thanks to its partnership with Apple over the better part of a decade, the company has found a lot of success. Another partial factor in that equation is that Foxconn has been unrivalled for with the slight exception of Pegatron.
It’s still up in the air whether or not Luxshare will finalize the investment deal with Catcher.