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Apple’s ‘move out’ of China plan: iPhones to India, AirPods, Watch to Vietnam – Times of India

Apple’s dependence on China is no secret as a large part of its manufacturing of devices takes place in the country. In the last few weeks, this dependence has increasingly put pressure on the company’s supply chain. Zhengzhou — also known as iPhone City — faced unrest on various grounds, which made the iPhone 14 Pro and Pro Max production take a hit. Apple confirmed that there will be delay in shipments of its flagship phones across the world. Now, a report by The Wall Street Journal suggests that Apple’s long-term plan is to move production out of China.

China’s loss, India’s gain?

Apple has a production presence in India with Foxconn and Wistron assembling iPhones in the country. According to the report, Apple is looking to expand its production capabilities in mainly two countries — India and Vietnam. In Vietnam, Apple has two partners — Luxshare and Inventec — which are the two main assembly partners fro AirPods and HomePods line of products.
Covid-19 has created a lot of upheaval in China and Apple has had to bear some of its impact as well. The report says that Apple has already told its manufacturing partners to make an attempt to do more work outside of China.
Last month, noted Apple analyst Ming-Chi Kuo suggested that India could see 40-45% of iPhone production. Currently, the figure is much less — say around 5% — but reports about Tata Group typing with Wistron have been gaining momentum. At the moment, almost 80% of the iPhones that are assembled in India are for the domestic market. Kuo suggests that Tata’s partnership with existing Apple partners “can accelerate the increase in the proportion of non-China iPhone production.”
The report also mentions that India comes with its fair amount of challenges for Apple. According to report, since each state has a different government, companies are saddled with too many obligations before actually getting into building products. A former Foxconn executive was quoted as saying “India is the Wild West in terms of consistent rules and getting stuff in and out.”

The long road ahead

Since China remains a crucial part of Apple’s manufacturing plans, the whole moving out could take at least three-five years.“Finding all the pieces to build at the scale Apple needs is not easy,” Kate Whitehead, a former Apple operations manager who now owns her own supply-chain consulting firm, was quoted as saying in the report. One of the main reasons Apple depends on China is that there has been a certain amount of political stability along with a large workforce. Not to forget, China is a big market for Apple’s products as well.
China’s harsh Covid-19 measures are also one of the reason that has been touted for Apple to make the move. An analyst called China’s Covid-19 policy “an absolute gut punch to Apple’s supply chain,” Daniel Ives, analyst at Wedbush Securities, told the Wall Street Journal that “this last month in China has been the straw that broke the camel’s back for Apple in China.”

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