Apple is contemplating on shifting between 15% and 30% of its manufacturing outside of China. According to Nikkei, the fruit company has been going around asking prominent players and key suppliers like Foxconn, Pegatron, and Wistron for insight about opening a factory in another country.
The catalyst for the shift is the ongoing trade war between China and the US, which is expected to intensify at the end of this month with the introduction of 25 percent tariffs on devices including phones, laptops, and tablets. However, Apple reportedly wants to shift production regardless of whether the trade dispute gets resolved.
“A lower birthrate, higher labor costs and the risk of overly centralizing its production in one country. These adverse factors are not going anywhere,” said one executive with knowledge of the situation. “With or without the final round of the $300 billion tariff, Apple is following the big trend [to diversify production],” giving itself more flexibility, the person added.
Outside of China, Apple is almost undoubtedly spoilt for choice. We’ve got a couple of Southeast Asian countries like Indonesia, Malaysia and Vietnam, as well as Mexico and India. However, according to executives who are part of the talks, Apple has seemingly marked both India and Vietnam as potential favourites.
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.
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