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Apple focusing to move its manufacturing units out of China

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Amid the ongoing unrest in Zhengzhou or the “iPhone city”, due to COVID-19 restrictions and wage disputes, Apple, reportedly, is focusing on moving some of its production outside China. Apple is telling its suppliers to reduce dependence on Taiwanese assemblers led by the Foxconn Technology Group in China. The company is planning to expand its production capabilities in mainly two Asian countries- India and Vietnam,  for assembling Apple products, according to a The Wall Street Journal report.

With the disruption in the company’s manufacturing factory in China, iPhone 14 Pro and Pro Max production has taken a hit. Apple confirmed that there will be delays in shipments of its flagship phones globally. The Bloomberg report further stated that Apple has lowered its overall production target to about 87 million units from 90 million units earlier. The shortage is mainly concentrated on the iPhone Pro models, while the regular iPhone 14 is in stock. According to a report by Counterpoint Research, quoted by CNBC, “customers who ordered the phones last week could expect to wait 37 days for delivery, the longest wait time since the models launched.”

Apple is betting on India to make it a major iPhone-producing country. Last month, reports came in that Foxconn is planning to expand its workforce four times in the next two years at the company’s plant in Tamil Nadu. The company plans to recruit 53,000 more workers to expand it to around 70,000 in the country, according to a Reuters report quoting Indian government officials.

Currently, Foxconn’s Tamil Nadu facility is assembling flagship ships models like iPhone 14. Recently, noted Apple analyst Ming-Chi Kuo said that India could see 40-45 per cent of iPhone production which is currently at 5 per cent. There are also reports about Tata Group acquiring Wistron’s India facility assembling iPhones.  Meanwhile, in Vietnam, Luxshare and Inventec are Apple’s two partners which are assembling the AirPods and HomePods line of products.

 

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