Coronavirus troubles underscore Apple's reliance on China
The COVID-19 outbreak has made it clear just how dependent Apple is on its supply chain in China, despite efforts to diversify where its products are made.
Apple is reportedly unlikely to shift flagship iPhone production outside of China despite COVID-19 concerns.
Last Friday, Apple CEO Tim Cook said that the company remains "fundamentally strong" in the face of the coronavirus threat. And while it's unclear whether COVID-19 is going to have any sort of long-term impact on Apple, the crisis does underscore the company's reliance on Chinese factories and workers.
Apple currently makes the majority of its products in mainland China, owing to the strong pool of highly skilled labor and advanced infrastructure in the country. Laden with demand for popular products like iPhone, Apple itself has over the past two decades helped build out the production facility latticework that is Chinese industry. The tech giant trained a bevy of new suppliers and supplied oxygen to handful of manufacturing giants including Foxconn and Pegatron.
In an interview last week with Fox Business Network, Cook reiterated some of the reasons why China's supply chain is important to the company, including quality, time to market and depth of engineering. Cost is also a factor, but Cook noted that labor hasn't been "cheap" in China for years.
Plans to look beyond China for large-scale manufacturing have been floated at Apple for years. The Wall Street Journal reports that Apple's reliance on the country "long frustrated" staff, and the company mulled relocating some production lines to Vietnam "as early as 2015." Those efforts were nixed by higher-level executives who said the shift would be "too challenging to undertake."
While Apple has been slowly diversifying its supply chain, it hasn't yet found an alternative to China. For example, the company manufactures some iPhone models in India and, at one point, had plans to produce iPhone 11 models there. According to a Foxconn source, however, India currently lacks the skilled labor and infrastructure necessary to produce OLED-equipped iPhones and as a result Apple halted plans to produce flagship handsets in the region.
That's likely to remain the case for the foreseeable future. This year, production of Apple's flagship smartphones is "unlikely" to be shifted to India even in the face of the outbreak, the Foxconn source said. The WSJ report indicates that new flagship models are likely to remain a China-exclusive production, at least through 2020.
When it comes to labor and infrastructure, China is hard to compete with. Even the U.S. has had trouble matching what's available in the country. Apple's new American-made Mac Pros are only being shipped to North and South America, while models meant for other markets are produced in China.
Apple's dependence on China and the recent coronavirus outbreak has forced the company to update its revenue guidance for the second fiscal quarter of the year, even as the Cupertino firm searches for alternative component sources.
Cook noted last Friday that China was "getting the coronavirus under control," however. Its supply partners in the area are also working to mitigate the effects, including paying factory workers extra to return to work.
Apple is reportedly unlikely to shift flagship iPhone production outside of China despite COVID-19 concerns.
Last Friday, Apple CEO Tim Cook said that the company remains "fundamentally strong" in the face of the coronavirus threat. And while it's unclear whether COVID-19 is going to have any sort of long-term impact on Apple, the crisis does underscore the company's reliance on Chinese factories and workers.
Apple currently makes the majority of its products in mainland China, owing to the strong pool of highly skilled labor and advanced infrastructure in the country. Laden with demand for popular products like iPhone, Apple itself has over the past two decades helped build out the production facility latticework that is Chinese industry. The tech giant trained a bevy of new suppliers and supplied oxygen to handful of manufacturing giants including Foxconn and Pegatron.
In an interview last week with Fox Business Network, Cook reiterated some of the reasons why China's supply chain is important to the company, including quality, time to market and depth of engineering. Cost is also a factor, but Cook noted that labor hasn't been "cheap" in China for years.
Plans to look beyond China for large-scale manufacturing have been floated at Apple for years. The Wall Street Journal reports that Apple's reliance on the country "long frustrated" staff, and the company mulled relocating some production lines to Vietnam "as early as 2015." Those efforts were nixed by higher-level executives who said the shift would be "too challenging to undertake."
While Apple has been slowly diversifying its supply chain, it hasn't yet found an alternative to China. For example, the company manufactures some iPhone models in India and, at one point, had plans to produce iPhone 11 models there. According to a Foxconn source, however, India currently lacks the skilled labor and infrastructure necessary to produce OLED-equipped iPhones and as a result Apple halted plans to produce flagship handsets in the region.
That's likely to remain the case for the foreseeable future. This year, production of Apple's flagship smartphones is "unlikely" to be shifted to India even in the face of the outbreak, the Foxconn source said. The WSJ report indicates that new flagship models are likely to remain a China-exclusive production, at least through 2020.
When it comes to labor and infrastructure, China is hard to compete with. Even the U.S. has had trouble matching what's available in the country. Apple's new American-made Mac Pros are only being shipped to North and South America, while models meant for other markets are produced in China.
Apple's dependence on China and the recent coronavirus outbreak has forced the company to update its revenue guidance for the second fiscal quarter of the year, even as the Cupertino firm searches for alternative component sources.
Cook noted last Friday that China was "getting the coronavirus under control," however. Its supply partners in the area are also working to mitigate the effects, including paying factory workers extra to return to work.
Comments
EDIT: Never Mind.
Not a chance.... By April it will be in full bloom. China is already starting to block flights into their country to stop importing the virus from world hot spots like Italy, Korea, etc...
That's just popular propaganda. Did you even read the article? In it, Cook said:
That's how it is today. Just a few decades ago people took responsibility. That was the democracy that I grew up in.
I don't have a clue what the message is that you are attempting to communicate, but for the record, Apple will have to diversify if it ends up true that they have forced labor in their productions system.
https://www.bbc.com/news/world-asia-china-51697800
"Thousands of Muslims from China's Uighur minority group are working under coercive conditions at factories that supply some of the world's biggest brands, a new report says.
The Australian Strategic Policy Institute said this was the next phase in China's re-education of Uighurs.
China has already detained about a million Uighurs at internment camps, punishing and indoctrinating them.
Officials say the camps are aimed at countering extremism.
The ASPI report comes after a senior Chinese official told reporters in December that members of the minority group being held in the camps had now "graduated".
What does the report say?
Between 2017 and 2019, the ASPI think tank estimates that more than 80,000 Uighurs were transferred out of the far western Xinjiang autonomous region to work in factories across China. It said some were sent directly from detention camps.
ASPI said the Uighurs were moved through labour transfer schemes operating under a central government policy known as Xinjiang Aid.
According to the report, the factories claim to be part of the supply chain for 83 well-known global brands, including Nike, Apple and Dell."
This is an epic fuckup by the CCP.
“Coronavirus troubles underscore world’s reliance on China”