Apple’s reliance on Chinese supply partners and manufacturing arms is not a secret. And a new report suggests it’s a reality that isn’t going away anytime soon.
The Wall Street Journal has a report out today, outlining not only Apple’s reliance on China for its production needs, but how the company has held onto that line of thinking for years now. Even dating back to at least 2015, when some executives were tossing out ideas of moving some iPhone production outside of the region.
The report says that “as early as 2015” there were some operations executives within Apple suggesting the company move some of its production efforts outside of China. Specifically, into Vietnam. Those executives believed it would have given Apple a boost in not only production workers, but also “creating a new cluster of component providers”.
Some operations executives suggested as early as 2015 that the company relocate assembly of at least one product to Vietnam. That would allow Apple to begin the multiyear process of training workers and creating a new cluster of component providers outside the world’s most populous nation, people familiar with the discussions said.
Basically, remove some of the weight off the company’s in China.
However, as you can tell by now, years later, that did not happen. The report indicates that executives at higher levels rebuked the idea, saying it would be too complicated a task to roll out.
But things change, even if at a snail’s pace. The report states that Apple is likely not going to give up its reliance on China for its iPhone production anytime soon. However, that doesn’t mean it isn’t already starting to branch out. The company is already manufacturing some of its older iPhones in plants in India, for instance. And apparently Apple wanted to extend that to the iPhone 11 last year, too.
That did not pan out, though. Partly due to infrastructure:
But the technology giant halted the effort before setting up a single manufacturing line for that device, a person familiar with the matter said. India wasn’t ready to supply skilled labor or the robust infrastructure Apple expects. It opted to make the iPhone 11 in China instead.
The novel coronavirus came up in the report, too — a topic Apple’s CEO, Tim Cook, touched upon just recently. Despite the impact the outbreak has had all around the globe, but especially in China, Apple is not likely to take this as a sign that it should move production out of the region in the near future. Based on this report, Apple may be branching out just a bit, but it sounds like China will remain the epicenter of iPhone production for years to come.
What do you think? Should Apple be moving production out of China and start reducing some of its reliance in the area?
The full report is available to read at The Wall Street Journal.