Lauly Li and Cheng Ting-Fang report for Nikkei Asian Review:
Apple has asked little-known Luxshare-ICT to double production of AirPods Pro earphones at its Chinese facilities to 2 million units a month, sources said. Apple has also asked Luxshare and fellow Chinese company GoerTek to boost production at their Vietnam-based factories of the lower-cost AirPods, the world’s best-selling wireless earbuds. “Apple has increased monthly orders for the latest AirPods Pro from 1 million units to at least 2 million units thanks to healthy demand,” said one of the people familiar with the situation. The Pro version wireless earbuds are produced at two Luxshare factories in mainland China, sources added.
“In the future, [AirPods] could well sell at the level of the iPhone with some 200 million units a year,” said Jeff Pu, a veteran tech analyst at GF Securities, who estimates Apple will ship 80 million wireless earphones in 2020. Bloomberg last week reported that shipments this year could double to 60 million units, thanks in part to the AirPods Pro’s popularity.
Founded in 2004 by Grace Wang, a former production line worker at Foxconn, the world’s biggest electronics maker and main iPhone assembler, Luxshare has evolved from a small maker of components into a manufacturing powerhouse that serves international customers including Apple, Huawei, Oppo, Vivo and Tesla.
The Chinese company entered Apple’s supply chain as a peripheral component supplier in 2012. But in just five years it emerged as a source for more complicated work. It has been making AirPods since late 2017, and this year won orders to assemble Apple Watches as well. Tim Cook, Apple’s CEO, has praised Luxshare’s success as a realization of the “Chinese dream.”
The Chinese-made AirPods Pro already face tariffs due to the ongoing U.S.-China trade dispute. Despite the unrest in Hong Kong, China and the U.S. are “very close” to a phase one trade deal, the Global Times, a tabloid controlled by China’s Communist Party, reported on Monday.
Apple, which has also sought direct tariff relief from U.S. President Donald Trump, has meanwhile turned to Vietnam as a production base in order to avoid U.S. tariffs on Chinese goods. GoerTek is ready to begin mass production of AirPods there, while Luxshare is trialing production as a prelude to mass production, Nikkei Asian Review has learned.
MacDailyNews Take: As we wrote last week, “Anyone who claims that “Apple hasn’t had a hit since Steve Jobs passed” has no earthly idea what they’re talking about. Apple’s AirPods and Apple Watch families are the types of killer products – runaway blockbuster hits – that merely mortal companies dream about, but never achieve.”
Not bad. People were saying how there were no Apple product successes under Tim Cook. Maybe none have rivaled Steve Jobs hits, but hey, those were unusually amazing hits (iPod, iPhone, iPad) by any standards.
Although iPad sales rose faster initially, Apple Watch sales have grown steadily and may be exceeding iPad sales and are still growing. Watch sales trajectory is, so far, similar to iPod’s. Only iPhone was a bigger revolutionary success than Apple Watch. And AirPods are rocking as well. Those that keep saying Apple isn’t doing as well under Cook are just cherry picking their compares. Those that have put their money on Cook’s Apple now have plenty of money to buy expensive Apple toys in their early retirements. Those who sold their stock because Jobs is gone will continue to whine that they can’t afford Cook’s expensive “boring” products.
Hmm…AppleWatch, AirPods and services have all been great successes under Cook’s helm.
The funny thing with Apple is that they take their time to make a new product line. It is rare that they make a mistake in a new product whereas as every other company just throws out shit and sees what sticks.
When the signal goes from one’s device to the AirPod Pro, does it go equally to each Pod, or does it go to just one Pod and then through the brain to the other Pod. I’m sure that’s not very clear because I’m not an engineer, but perhaps you get the dfrit of my question.