Apple Watch assembly partner Luxshare hopes to be able to work on the iPhone supply chain earlier than anticipated, with it now making preparations to start work making the iPhone 12 mini following the acquisition of a Wistron facility ahead of its acquisition.
Luxshare was reported in July to be acquiring an iPhone production facility in China from Wistron, in a purchase valued at 3.3 billion yuan ($499 million). While the acquisition has yet to complete, it appears Luxshare is keen to get the production of iPhones in the facility up and running as quickly as possible.
A team of employees from Luxshare are observing production at the plant, Nikkei Asia reports, a move which is unexpected for a few reasons. For a start, it wouldn’t be expected for the study of production lines to occur before the purchase has been finalized.
Secondly, Apple’s enhanced levels of secrecy surrounding the supply chain typically means it is rare for employees from outside a company to go to another’s to view how production takes place. This is doubly so for the end of the year, which is when iPhone production is at its peak.
Sources of the report also claim the team are largely examining production for the iPhone 12 mini. This may be a change in plan for Luxshare, as it was believed to start producing older iPhone models from 2021, not current-generation models.
It was thought Luxshare would follow the same path as others joining Apple’s iPhone supply chain, in assembling older models to prove itself to Apple before moving to newer models. Sources say the original plan was for a small-scale production of older models, followed by large-scale manufacturing in 2022.
It is claimed the plant’s current production handles approximately 20% of total orders for the iPhone 12 mini, so continuing that production at the facility seems to be entirely plausible. Given Apple’s seeming allowance for the production line’s study and the installing of employees at the facility, it strongly suggests this is also Apple’s intention.
Once the acquisition is completed, Luxshare will join a small group of companies responsible for iPhone assembly, which includes Foxconn, Pegatron, and Wistron. The company already produces the Apple Watch and AirPods for Apple, so it has demonstrated a capability to work to Apple’s strict standards, and has experience working with the company, making a move to iPhone production a logical progression.
For Apple, the addition of Luxshare to the roster may be beneficial as it increases competition between its assemblers, which could potentially reduce costs. The move also gives Apple more choice for where to source iPhone assembly, spreading the risk of production from issues ranging from pandemics like COVID-19 to trade wars, and even problems like abuse allegations.