Apple could move its iPhone production to these countries

  • Apple is tired of its production woes in China and is looking to move some of its supply chain elsewhere.
  • According to a report from the Wall Street Journal, India and Vietnam are the top candidates right now.
  • Production at the “iPhone City” factory is slowly returning to normal, but iPhone Pro devices will still be scarce this holiday season.

As iPhone production begins to return to normal at the Foxconn manufacturing facility in Zhengzhou, China, a new report from the Wall Street Journal (WSJ) indicates that Apple is looking to move some of its supply chains out of the country.

To that end, Apple is reportedly looking at India and Vietnam to pick up the slack.

The agreement between China and the American tech monolith has seen most of the company’s hardware manufactured in the communist state. It is believed that the Foxconn plant at one point built 85 percent of all Apple’s iPhone Pro devices.

But supply chain disruptions have caused ire at Apple’s California offices. As rare civil unrest took hold across the communist state over November, workers at Foxconn flew into protest action citing harsh COVID-19 restrictions and undelivered promised wages.

According to one of Reuters’ sources, 30 percent of iPhone production was affected by the protests, which meant that Apple’s supply targets for the lucrative holiday season period had to be significantly downsized by two to three million iPhones at the time.

It is now believed that disruptions at Foxconn will cost Apple 10 million fewer iPhones, with top-of-the-range devices like the iPhone 14 Pro and Pro Max being the worst hit.

Apple had been advising customers to expect longer wait times before they received their devices, which is now believed to be among the longest wait times for high-end iPhones in the product’s 15-year history.

During the Black Friday weekend, several publications picked up stories of how iPhone Pro devices simply were not available in the United States. The iPhone Pro drought will be even more pronounced in South Africa, which is lower in Apple’s supply target totem poll.

According to Ming-chi Kuo, TF International Securities analyst, Apple wants to ship 40 to 45 percent of its iPhone production from China to India to remedy these problems in the future.

Vietnam is also being looked at to shoulder more of the manufacturing burden, but it is being earmarked to produce AirPods, Smartwatches and Mac notebooks instead.

No luck will come for those looking to buy iPhones during the holidays but the new year could see more models available as production steadily returns to Foxconn.

The hiring of new workers is also ramping up at the facility, which expects manufacturing to improve by 40 percent in December. Another positive for Apple is that the local Zhengzhou government lifted harsh COVID-19 lockdown rules on 30th November, which would remove a major point of contention for the facilities’ workers.

It is important to note, however, while Apple looks outside of China, moving such large pieces of its supply chain will be a grand endeavour and not one expected to happen any time soon.

India and Vietnam also have their drawbacks, compared to China. This includes governmental instability and infrastructure limitations.

“India is the Wild West in terms of consistent rules and getting stuff in and out,” Dan Panzica, a former Foxconn executive turned supply-chain advisor, told the WSJ. In India, each state is government differently and regional rules have been difficult for Apple to successfully navigate in the past.

While India has a large population, the country does not have manufacturing sites that can reach hundreds of thousands of workers like in China. So if Apple wants to diversify, it will have to be more flexible.

 “Apple is going to have to find multiple places to replace iPhone City (Foxconn),” said Panzica.

“They’re going to have to spread it around and make more villages instead of big cities.”

[Image – Laurenz Heymann on Unsplash]


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