Ongoing trade conflicts between the US and China have highlighted again how dependent Apple is on China for its product manufacturing. Today, a new report details the company’s plans to shift more of its supply chain to India, and the ways China is complicating those efforts.
Apple aims to move half of iPhone production out of China, but it’s facing pushback
There’s no doubt that Apple’s dependence on China for product assembly has become a liability for the company.
What was once seen as a strength for Apple, in the midst of an ongoing US-China trade war, is currently a major vulnerability in Wall Street’s eyes.
According to The Information, Apple has been making moves to try reducing its dependence on China…but as has been reported previously, Chinese authorities aren’t making that very easy.
Wayne Ma writes at The Information:
Earlier this year, Chinese authorities refused to allow one of Apple’s Chinese equipment suppliers to export machinery to India that Apple needed for the upcoming iPhone 17’s trial production, according to two people with direct knowledge of the matter. So the supplier got creative.
It set up a front company in Southeast Asia to buy the machines. Once the equipment reached the Southeast Asian country, it went to a factory in India operated by Foxconn, the Taiwanese company that builds most of Apple’s iPhones in China, the people said.
Ma continues later:
In many cases, Chinese authorities are delaying or blocking shipments of iPhone equipment to India without explanation, according to multiple people involved in iPhone production.
Foxconn has seen approval times from Chinese authorities for exporting iPhone-making equipment from its China factories to those in India rise from two weeks to as long as four months, one of the people said. They are also rejecting some export applications without explanation, the person added.
Currently Apple assembles roughly 20% of iPhones in India, a number that’s taken several years to build up to.
Per the report, Apple wants to take things much further though, with “a long-term goal of moving about half of its iPhone production out of China.”
9to5Mac’s Take
Navigating the global dynamics of authorities in the US, China, and India, is no doubt full of challenges. I wonder, though, if this report might help Apple’s case with the Trump administration at least.
Let’s assume today’s report gets widespread media attention. The narrative is: Apple is trying to diversify its manufacturing outside China, but China’s trying to stop it.
Even if Apple’s attempted shifts toward India don’t actually help the US at all, it could shore up fresh US government support—and possibly longer-term tariff exemptions—as the administration throws its weight behind Apple in an attempt to harm China.
What are your takeaways from this report? Let us know in the comments.
Best iPhone accessories
FTC: We use income earning auto affiliate links. More.
