It is no secret that Apple is heavily dependent on China when it comes to the supply chain. The company talked about relocating its supply chain during U.S. China trade wars and the same is being said now. This time around, coronavirus has dampened Apple’s production plan as the epidemic claimed thousands of lives in China.
A new report by the Wall Street Journal claims that Apple’s operation executives suggested in 2015 that the company should shift assembly one of its products to Vietnam. The plan was to train the workers across multiple years and ready component providers outside China.
Some operations executives suggested as early as 2015 that the company relocate assembly of at least one product to Vietnam. That would allow Apple to begin the multiyear process of training workers and creating a new cluster of component providers outside the world’s most populous nation, people familiar with the discussions said.
However, upper management dismissed the idea and felt that the shift would end up being too challenging. At the same time, Apple was looking to ramp up its production in India. This would allow them to completely make an iPhone in India and reduce reliance on China. Apple is said to have halted the process as India was not ready to supply skilled labor. Furthermore, the report also claims that India’s infrastructure was lacking.
Does this mean Apple will shift flagship iPhone production outside China? Apparently not. Despite the coronavirus and other challenges, the company is likely to continue the production of the iPhone in China. India seems to be a close second, however, due to the reasons above, Apple is delaying its plans to shift to India. Meanwhile, Apple’s supply chain in China is seemingly hit. The company has downplayed the impact and maintained that the iPhone is built across the world and not only in China.[via WSJ]