Following strong demand, Apple has doubled the production of the AirPods Pro from 1 million units per month to at least 2 million units. The company will use a “wolflike” Chinese supply-chain partner to meet the excess demand for the AirPods Pro.
This new supplier is Luxshare-ICT which produces the AirPods Pro for Apple at two of its factories in China. Additionally, the company has also asked Luxshare and GoerTek to boost the production of the cheapest AirPods as they continue to be in high demand.
“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.
Luxshare making the AirPods Pro for Apple might surprise many since the company is known to rely on experienced supply-chain partners for its high-end products. However, Luxshare managed to win the contract from Apple for the AirPods Pro thanks to its “wolflike” culture meaning it can rapidly react to market and consumer demands. The company had also been assembling the regular AirPods for the Cupertino company since late 2017.
“It’s a very rare case that Apple sources a brand-new and high-end device firstly to a Chinese company … That means this supplier really is able to meet Apple’s critical demands for quality and efficiency,” one source said.
Luxshare has a “wolflike” culture that values aggressiveness, an executive at an Apple supplier added. “Their team is young and moves so fast … They told me that you guys are great but you are not combative as a wolf to adapt to rapidly changing business dynamics.”
The growth of Luxshare in just five years in Apple’s supply chain has worried a lot of other Taiwanese and Japanese companies. They believe that if they don’t keep improving, Luxshare will end up eating them for lunch.
When the AirPods were first launched by Apple, they were in short supply for almost a year. The AirPods Pro are also in heavy demand so it will be interesting to see how Luxshare with its “wolflike” culture meets this demand. If it manages to bump up the production of the AirPods Pro significantly before the critical shopping season, it will likely end up winning orders for more products from Apple in the future.