From Reuters via the New York Times:

A Taiwanese firm has dropped its libel claim against two Shanghai journalists and their newspaper for saying that workers at a plant manufacturing iPods were mistreated, the official Xinhua news agency said on Sunday.

Shenzhen-based Foxconn, which manufactures iPods for Apple Inc. , and the China Business News had apologized to each other for the trouble caused by the lawsuit, Xinhua said.

In a joint statement the two sides also agreed to cooperate to protect workers’ rights, the news agency added. [Full Text]

See also Xinhua’s Shenzhen court ruling on Foxconn case “absurd” and more there; and Lian Yue’s No More Foxconn: Chinese Propaganda Department and AP’s In iPod Labor Case, Damages Claim Is Lowered