Apple is considering transferring 15% to 30% of its manufacturing to areas outside China. According to the Nikkei, the fruit company has been looking for well-known companies and major suppliers such as Foxconn, Pegatron and Wistron to understand the idea of opening a factory in another country.
The catalyst for this shift is an ongoing trade war between China and the United States, which is expected to intensify at the end of this month with a 25% tariff on equipment including mobile phones, laptops and tablets. However, it is reported that regardless of whether trade disputes are resolved, Apple hopes to shift production.
“Lower birth rates, higher labor costs, and the risk of over-concentration in one country. These disadvantages are not everywhere,” said one executive. The person added: “Either whether there is a $300 billion tariff in the final round, Apple is following the general trend of [diversification of production],” to make yourself more flexible.
Outside of China, Apple is almost undoubtedly spoiled. We have several Southeast Asian countries such as Indonesia, Malaysia and Vietnam, as well as Mexico and India. However, according to executives involved in the negotiations, Apple seems to have seen India and Vietnam as potential hot spots.
News of Apple’s plans come just weeks after Foxconn said that it has enough capacity outside China to make enough iPhones for the US market if required. It also follows the announcement from Google’s Nest division and Nintendo that their products will no longer be produced in China. Instead, production will be shifted to Thailand and Vietnam.
At this stage, Apple still hasn’t set a deadline for the big move, as it’s still waiting on its suppliers’ advise over which country would be most ideal for its shift. Sadly, the brand also failed to specify how many jobs in its China outlet would be affected by the 15% to 30% shift.