Bitter trade relations between the US and China have severely affected Apple’s production of iPhones, iPads, AirPods, and MacBooks. This has forced Apple to think seriously about moving iPhone production out of China.
Notably, the iPhone is the poster boy that brings huge revenue for Apple. Since 90% of all Apple products are assembled in China, Apple is now planning to explore other regions, where Apple suppliers can set up their units.
Apple Planning to Move Its Suppliers Out of China
For this project, Apple has set up a team of 30 to 40 people, who will investigate the costs of moving between 15% and 30% of iPhone, iPad, and AirPods. According to the Nikkei report, the team’s main agenda is to see if Apple can reduce the effects of US/China tariffs.
Moreover, the team will also calculate the cost implications of moving production out of China. As per Nikkie, some of the leading suppliers have confirmed that Apple asked them to look into moving and restructuring production.
Apple has created this team in late 2018; the team will talk to the suppliers, who are involved in assembling iPhones, iPads, AirPods, and MacBooks. A few suppliers are Compal, Goertek, Foxconn, Inventec, Luxshare, Pegatron, Quanta, and Wistron.
The report also reveals that Apple has a “sense of crisis” following the US-China trade war. What concerns Apple most is China’s reaction to the tariffs imposed by China and how that reaction can force Apple to raise prices in the US.
Since Apple always underlines the quality of its products, this move of production units will take “at least a year and a half.”
Nikkei sources claim that Apple is in conversation with the governments of Mexico, India, Vietnam, Indonesia, and Malaysia. The team Apple is in talks with these governments about getting special treatment for Apple suppliers.
That’s all folks!
For the last couple of years, Apple has been facing criticism for manufacturing high-cost iPhones. This move of Apple might reduce its manufacturing cost and the tech giant may sell its products at cheaper rates.