From Cables To Vision Pro: How Luxshare Is Replacing Foxconn In Apple's Ecosystem

Consumer tech giant Apple Inc.’s AAPL decades-long relationship with Taiwanese contract manufacturer Foxconn is undergoing a quiet but significant transition in recent months.

Check out the current price of AAPL stock here.

What Happened: On the ChinaTalk podcast on Tuesday, journalist and author of the book Apple in China, Patrick McGee, highlighted the shift in Apple’s expansive global supply chain, which is now increasingly leaning towards Luxshare, a Chinese manufacturer.

Once mainly known for supplying Apple with its cables and other accessories, that manufacturer is now taking on some of the most complex and valuable products in the tech giant’s value chain, such as the Vision Pro.

According to McGee, this reflects a broader pivot inside Apple toward politically favored Chinese manufacturers, often referred to as the “red supply chain.” Luxshare is known for its close ties to the Chinese government and offers Apple the kind of manufacturing compliance and speed that few others can match.

“That's the rise of the red supply chain in action,” he says.

According to McGee, this is more than just a supply chain realignment. It’s a strategic recalibration in the face of rising geopolitical tension between the U.S. and China.

“Apple thought they were wearing the pants in this relationship for the first two decades,” he says, before realizing that they were, in fact, “lured in by the siren call of an emerging superpower.”

Here, McGee is referring to the fact that Apple’s business decision for the sake of efficiency has, over the years, turned into a strategic vulnerability, with China now holding immense leverage in the relationship.

Foxconn's hold has loosened just as Luxshare and other Chinese firms, backed by favorable policy and massive state support, have scaled into national champions. “Luxshare is China-born, China-backed,” McGee added.

Why It Matters: A month ago, McGee said that Apple has unwittingly powered the rise of its own competitors, Oppo, Vivo, Huawei, and Xiaomi. “The reason their technology is so good is Apple trained all of their suppliers,” he said.

This comes as the company begins ramping up output in India, as geopolitical tensions continue to flare between the United States and China.

Recently, the company deployed $1.5 billion in a display production module in Chennai, through Foxconn, despite receiving pushback from President Donald Trump on the matter.

Price Action: Apple shares were down 0.60% on Tuesday, trading at $200.30, and are up 0.36% after hours.

Apple isn’t faring too well in Benzinga’s Edge Stock Rankings, with low scores and unfavorable price trends across the board. Click here for deeper insights into the stock.

Read More: