A new report from the Wall Street Journal today details Apple’s dependency on China for its supply chain, and how that is unlikely to change in the near future. According to the report, some Apple executives suggested relocating manufacturing of at least one product to Vietnam, but the idea was “rebuffed” by senior management.
The report explains that operations executives at Apple suggested “as early as 2015” that the company should “relocate assembly of at least one product to Vietnam.” Doing this, the people believed, would have allowed Apple to begin the “multiyear process of training workers and creating a new cluster of component providers” outside of China.
But upper-level executives are said to have rebuffed the idea, seemingly due to features the shift would be “too challenging to undertake.”
Meanwhile, Apple is making some of its older iPhone models in India, and today’s report says Apple had a “plan” to make the iPhone 11 in India as well. This would have signaled a major shift in Apple’s strategy, with the iPhone 11 representing the first new model iPhone to be made outside of China.
But when the time came to actually set up Indian manufacturing for the iPhone 11, Apple halted the effort:
But the technology giant halted the effort before setting up a single manufacturing line for that device, a person familiar with the matter said. India wasn’t ready to supply skilled labor or the robust infrastructure Apple expects. It opted to make the iPhone 11 in China instead.
Despite the ongoing coronavirus situation in China, and the effects it’s having on Apple’s supply chain, today’s report says the company is “unlikely” to shift flagship iPhone production outside of China.
Apple is unlikely to shift any of the production of its most expensive iPhones to India later this year, a person familiar with Foxconn’s overseas operations said. The supply chain isn’t in place, and workers in India aren’t ready to produce the high-end, organic light-emitting diode models, this person said.
Apple suppliers and manufacturing partners have been hit by the coronavirus outbreak in China and other countries, including South Korea. Apple, however, has stressed that the iPhone is “built everywhere in the world,” not just in China.
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