Apple is considering to slowly diversify its manufacturing for export to countries like India and South Asia. The company, which has been increasingly dependent on Chinese facilities such as Foxconn, Pegatron, etc., for manufacturing its diverse portfolio, has decided to make this slow shift in the post-pandemic period.
Apple has instructed its manufacturing partners to perform more NPI (New Product Introduction), which is a preliminary stage of mass production work in which contractors translate a brand’s product blueprints and prototypes into a precise manufacturing plan outside of China, according to a Wall Street Journal report.
The company was thinking of making this geographic change for some time now but the pandemic had posed a hurdle. The recent developments in Shanghai which have led to further strict lockdowns have intensified the resolve to diversify. Another reason for this move is the increasing tensions between U.S and China relations and the travel restrictions between the two countries.
India and Vietnam are being considered as major alternatives to China. The countries already account for a small portion of Apple’s global manufacturing. Foxconn, Apple’s manufacturing partner has already set up facilities in India to help make iPhones for the Indian market. Apple is now talking with its various suppliers to set up manufacturing hubs in India for export.
However, China will still be the most prominent manufacturing hub for Apple due to various factors such as a well-trained workforce, low costs relative to the U.S., and a deep network of parts suppliers that are hard to recreate elsewhere without years of effort.
The shift to alternate manufacturing hubs will be slow and they will serve as a manufacturing hub for new product categories such as AR headsets, etc., predominantly. The upcoming months will shed more light on how Apple will lead this diversification.
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