Given the US-China trade tensions and the over-dependence on China for many Western firms, Apple is wary of what more repercussions this could mean for their business. As such, the tech giant is taking drastic measures to ensure that it continues to have significant operations across Asia. This marks a shift for Apple as it increases its level of looking overseas to strive despite today’s tumultuous economic and political climate.
Apple Has Been Relying on China for Manufacturing Products for Years
Apple, a major Western company, is aiming to lessen its dependency on China for manufacturing. A whopping statistic reveals that nearly 95 percent of all iPhones, iPads, Mac computers, and AirPods originate from Chinese factories. Not only this, but last year, Apple garnered a significant portion of its revenue from China — approximately $74 billion.
The tech company is deeply entrenched in the Chinese market, with an estimated 300,000 laborers now employed at Foxconn’s Zhengzhou worksite to create Apple products alone. This sturdy presence in the Far East country remains a testament to how much of an impact it has had on its sourcing and operations over recent years.
Kevin O’Marah, a researcher in the field of supply chain management, has noted that Apple is doing more than simply outsourcing production to China. In fact, the tech giant has constructed an intricate and comprehensive supply and manufacturing chain in China, a process that isn’t easy to shift away from. Plus, key product designers and design engineers responsible for production have been stationed in China by Apple over the past fifteen years.
Apple’s Considers Other Countries Following Its “China +1 Policy”
In light of the growing rift between China and the United States, Apple is facing considerable pushback from investors and politicians to cut ties with its Chinese suppliers. It has already begun diversifying its supply chain by relocating production to Vietnam and India to meet these demands.
In 2017, Apple took the proactive step of commencing a shift to Vietnam for production lines, as reported by Asia Financial. Furthermore, vendors associated with Apple have either already begun relocating some production from China or are seriously contemplating such an action to avoid any potential repercussions brought on by the ongoing trade war. As an example, as reported by Reuters, Foxconn established assembly lines for Apple’s iPad tablet and MacBook laptop within its factory in Vietnam’s Bac Giang province. Additionally, Foxconn has committed to invest up to a billion dollars towards extending their iPhone assembling plant in India; this is due to the strong insistence from Apple that production diversifies beyond China.
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