Since the trade war began last year, analysts have been closely parsing every production-related decision by Apple and its suppliers, seeing them as bellwethers of the global consumer-tech industry: Will the American tariffs permanently restructure the global supply chain? Increasingly it's looking that way.
Because not long after a Foxconn executive warned that the largest manufacturer of iPhones in mainland China was ready to help Apple shift production elsewhere, Nikkei reports that suppliers for iPhones, iPads, MacBooks and Apple Ear Pods have all drawn up plans to move 15%-30% of production outside of the mainland, with India, Vietnam, Mexico and Malaysia looking like the top alternatives.
At this point, even if Washington doesn't follow through with plans to slap tariffs on another $300 billion in goods, companies, including Foxconn, Pegatron, Wistron, Quanta Computer, iPad maker, Compal Electronics, and AirPods makers Inventec, Luxshare-ICT and Goertek have all been asked by Apple to evaluate options outside of China.
This is the biggest reason why Apple needs its suppliers to write up plans for long-term "Diversification" of production.
If Apple and its suppliers decide to follow through, the changes won't happen right away: In any case, Apple moving 15% of its iPhone production out of China would be a "Gargantuan endeavor," laden with risks like supply-chain disruption and higher costs according to Wedbush.
The team of more than 30 people is discussing production plans with suppliers and negotiating with governments over financial incentives they might be willing to offer to attract Apple manufacturing, as well as regulations and the local business environment.
At this point, it looks like nothing short of the complete reversal of trade war tensions would stop Apple from directing suppliers to move at least some production elsewhere on a permanent or semi-permanent basis.
https://www.zerohedge.com/news/2019-06-19/trade-war-rages-apple-plans-shift-30-production-outside-china
Because not long after a Foxconn executive warned that the largest manufacturer of iPhones in mainland China was ready to help Apple shift production elsewhere, Nikkei reports that suppliers for iPhones, iPads, MacBooks and Apple Ear Pods have all drawn up plans to move 15%-30% of production outside of the mainland, with India, Vietnam, Mexico and Malaysia looking like the top alternatives.
At this point, even if Washington doesn't follow through with plans to slap tariffs on another $300 billion in goods, companies, including Foxconn, Pegatron, Wistron, Quanta Computer, iPad maker, Compal Electronics, and AirPods makers Inventec, Luxshare-ICT and Goertek have all been asked by Apple to evaluate options outside of China.
This is the biggest reason why Apple needs its suppliers to write up plans for long-term "Diversification" of production.
If Apple and its suppliers decide to follow through, the changes won't happen right away: In any case, Apple moving 15% of its iPhone production out of China would be a "Gargantuan endeavor," laden with risks like supply-chain disruption and higher costs according to Wedbush.
The team of more than 30 people is discussing production plans with suppliers and negotiating with governments over financial incentives they might be willing to offer to attract Apple manufacturing, as well as regulations and the local business environment.
At this point, it looks like nothing short of the complete reversal of trade war tensions would stop Apple from directing suppliers to move at least some production elsewhere on a permanent or semi-permanent basis.
https://www.zerohedge.com/news/2019-06-19/trade-war-rages-apple-plans-shift-30-production-outside-china
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