Apple Estimates Cost Evaluation to Shift its 15-30% Production Base out-of China: Report

Amidst the ongoing trade war between US-China, the Cupertino tech giant is said to have asked its primary suppliers to evaluate the cost implications from shifting its production capacity of 15-30 percent from China to Southeast Asia, according to the latest Nikkei Asian Review report. This new move from Apple is said to be the company’s preparation of the radical restructuring of its primary supply chain outside China.

Citing multiple sources, the latest report suggests that this evaluation is due to the ongoing spat between the US and China and the trade tensions, for that matter. However, the report also indicates that there would be no going back from this speculative move aforementioned even if the trade tensions between both the countries get resolved. The report further indicates Apple is now aware of risks of relying on China for manufacturing of all its products — thanks to China-US trade dispute, which is why this evaluation had taken place, sources cited in the report.

For over the past twenty years, it is said that China has been and still is the primary production industry for Apple. This has made Apple to create skilled workers in the course of time, which now led to around 5 MIllion Chinese jobs due to Apple and its products. The reports further indicate building up the same scale of production elsewhere out of China will indeed take time; however, it appears long-term efforts are said to bring in results 2-3 years from now.

Furthermore, the predominant Apple products assembling companies that include — Foxconn, Wistron, Pegatron, Quanta Computer, Compal Electronics and also Inventec have been asked to evaluate the options outside of China, according to sources familiar with the matter in the report suggests.

Currently, it is believed that more than 90% of Apple products are manufactured in China and recently Apple had started assembling higher-end iPhones with the support of Foxconn India and the Wistron facility in Bengaluru, which already assembles cheaper iPhone models as well. That said, with this new move from Apple to make its products get manufactured outside China would indeed help our country, wherein the current manufacturing units are reasonably small when compared to China.

The report also showcases the countries that are being considered by Apple outside China, which include India, Mexico, Indonesia, Malaysia, and Vietnam out of which the Mexico and India are considered to be the company’s favorites, suggests the report. The ongoing spat between the US-China is somewhat beneficial to our country as it can play a significant role when it comes to replicating its production facilities in the country. Stay tuned to PhoneRadar for more such interesting updates.

(Featured image is of Apple Xinyi A13 in Taipei, Taiwan. Source: Apple)

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