Apple has not been able to cut its ‘love’ with China: Up to 7 mainland companies participate in the Vision Pro glass production chain, India is not mentioned

Luxshare Precision Industry, the official Chinese supplier of Apple’s AirPods products and the partner to win the iPhone 15 order, is emerging as the company that assembles the new Vision Pro mixed reality glasses, according to SCMP.

It is known that Luxshare Precision Industry is one of seven Chinese companies acting as Apple’s Vision Pro suppliers. Camera module maker Cowell E Holdings and Shenzhen Desay Battery Technology, which supplies lithium batteries and power management systems, are also on the list.

In addition, Taiwanese (Chinese) companies also make up the majority of the list of suppliers involved in assembling Vision Pro, such as lens and optical components manufacturer Largan Precision, a technology specialist. touch screen GIS-KY and chip giant TSMC, according to Commercial Times.

According to SCMP, companies based in China and Taiwan (China) account for more than half of the total number of suppliers involved in the production of Vision Pro glasses. Korean companies such as Samsung Electronics, LG Electronics or Sony of Japan are also on the list.

“Clearly the current suppliers of Vision Pro are all the world’s leading suppliers of consumer electronic components. When Apple releases a lower-priced AR/VR product in the near future, the supply chain structure is likely to remain the same as it is now,” said Ivan Lam, senior analyst at the public research and consulting firm. Technology Counterpoint Research said.

According to Wellsenn XR’s analysis, the estimated cost of materials for the Vision Pro manufacturing process is about $1,590, about half less than the retail price of $3,499 announced by Apple.

Here are the details of Chinese companies involved in Apple’s Vision Pro manufacturing supply chain:

1. Luxshare

Based in the southern technology hub of Shenzhen, Luxshare has been among Apple’s top suppliers for the past two decades. This is also the first Chinese contract manufacturer trusted by the US tech giant to produce the Vision Pro.

2. Cowell E Holdings

The Dongguan-based company that has worked with Samsung, LG, and Apple received a strategic investment from Luxshare in 2020 to expand into the production of smartphone camera lenses.

3. Goertek

The company, based in eastern Shandong province, was once one of Apple’s AirPods manufacturing partners. This year, Goertek was favored to become one of the suppliers for Vision Pro.

4. Desay Battery

Founded nearly 40 years ago, the Shenzhen-based company supplies lithium batteries to numerous mobile device companies, including Apple and Huawei. Desay Battery joined Apple’s supply chain after the company pursued a strategy of cutting production costs and looking to battery suppliers in China.

5. Shenzhen Zhaowei Machinery & Electronics

Founded in 2001, Shenzhen Zhaowei Machinery & Electronics supplies VR-oriented electric focus drive system for Vision Pro. They automatically adjust the lens, helping the user to see clearly and further.

6. Shenzhen Everwin Precision Technology and Lingyi iTech Guangdong

MacBook chassis maker Everwin Precision and iPhone charger supplier Lingyi iTech have been selected by Apple to supply some of the Vision Pro’s external assemblies, such as the midframe and case.

The above list partly shows that Apple still puts its faith in China’s vast supply network, despite the wave of shifting out of the mainland. The most valuable company on the planet makes great products, and the biggest momentum is said to come from the close relationship between CEO Tim Cook and China.

According to the Financial Times, Tim Cook let Apple “sink deep” into China for the past 20 years. After a secret deal in 2016 to invest $275 billion in China’s economy, workforce and technological capabilities, the iPhone became the world’s best-selling product.

In fact, Apple, despite being an American company, is increasingly looking like a Chinese business. The reason is partly due to the fact that the production line is too dependent on the country of billions of people, while 20% of the revenue comes from the mainland.

Apple wants to go outside the mainland, specifically, shifting iPhone production to India and Macbook production to Malaysia and Ireland. Hundreds of people have been assembled to transform the supply chain.

However, according to some experts, this effort may be in vain by. “All the information you are hearing about India is great. In our view, that’s a huge opportunity over the next decade, however, don’t expect things to change overnight,” said Angelo Zino, senior analyst at CFRA Research.

By: SCMP, FT