People try out new iPhones during a product launch event at Apple's headquarters in California, the United States, Sept. 10, 2019. Photo: Xinhua

Shares of Chinese electronic manufacture Luxshare ICT edged up by 1 percent to 55.69 yuan ($7.97) on Monday's closing, after it announced in recent days that the company and its main shareholder will purchase 100 percent shares of two subsidies of Wistron, the third-largest manufacture for the iPhone.

When the deal closes, Luxshare will own Wistron's factory in Kunshan, East China's Jiangsu Province, which could potentially make it the first original equipment manufacturer (OEM) for the iPhone in the Chinese mainland. The purchase price is 3.3 billion yuan. 

The two largest iPhone OEMs are Foxconn and Pegatron to date. 

Analysts said the deal shows Apple's strategy to diversify suppliers so that it will have more bargaining power in its supply chain to reduce costs. Meanwhile, the US company may also look to minimize risks by turning to a Chinese mainland-based supplier as relations between the world's two largest economies continue to fray over a range of issues.

Newspapers on the island of Taiwan quote industry insiders as saying that Luxshare will begin supplying iPhones in the second half of 2020 and could impact other Apple manufactures such as Foxconn and Pegatron by next year. 

Luxshare entered Apple's supply chain and became a parts supplier for the American firm in 2012. In 2019, the net profit of Luxshare soared 74 percent year-on-year to 4.714 billion yuan. 

Global Times