Apple Mulls Dumping China As Production Hub For Its iPhones
Burned by COVID lockdowns and worker protests at Foxconn plants in China that Apple subcontracts to manufacture its hugely popular iPhone, Apple is now compelled to put its amber eggs in other baskets, seeking less dependence on Foxconn, which profits from the low er wages in China, Yang Jie and Aaron Tilley reported for The Wall Street Journal.
Photo Insert: In recent weeks, Apple Inc. has accelerated plans to shift some of its production outside China.
Apple also profited from outsourcing the manufacture of its iPhones, but the Chinese situation is such that it will take years to stamp out COVID-19, which means the zero-COVID policy would continue, and there will be no assurance that Beijing would not intermittently impose lockdowns on factories when a worker sneezes.
In recent weeks, Apple Inc. has accelerated plans to shift some of its production outside China, long the dominant country in the supply chain that built the world’s most valuable company, say people involved in the discussions.
It is telling suppliers to plan more actively for assembling Apple products elsewhere in Asia, particularly India and Vietnam, they say, and looking to reduce dependence on Taiwanese assemblers led by Foxconn Technology Group.
Turmoil at a place called iPhone City helped propel Apple’s shift. At the giant city-within-a-city in Zhengzhou, China, as many as 300,000 workers work at a factory run by Foxconn to make iPhones and other Apple products.
At one point, it alone made about 85% of the Pro lineup of iPhones, according to market research firm Counterpoint Research.