A special team within Apple has been tasked with investigating the costs of moving between 15% and 30% of iPhone, iPad and AirPod to other countries in order to reduce the impact of US/China tariffs.
A team of between 30 and 40 people at Apple is surveying the company's major suppliers about the cost implications of moving production out of China. Nikkei reports that several major suppliers have confirmed that Apple has asked them to look into moving and restructuring production.
It's claimed that 90% of all Apple products are assembled in China. The team, which was formed at the end of 2018, is specifically talking to the suppliers assembling iPhones, iPads, AirPods, and MacBooks. Specific suppliers include Compal, Goertek, Foxconn, Inventec, Luxshare, Pegatron, Quanta, and Wistron.
The publication also says that Apple has a "sense of crisis" over the U.S.-China trade dispute. It claims that Apple is particularly concerned about what sanctions China could impose and how that could force the company to raise prices in the U.S.
However, the same sources are also saying that Apple is demanding a high level of quality and that this means that "at least a year and a half is necessary" to make any move.
Apple's team is reportedly also negotiating with local governments about securing preferential terms for those suppliers. According to Nikkei sources, the team is negotiating, or plans to negotiate, business terms with governments in Mexico, India, Vietnam, Indonesia and Malaysia.
News of Apple's team comes shortly after Foxconn announced that it would be able to move iPhone production away from China, should Apple ever ask it to.
Another iPad and MacBook supplier, Pegatron, has previously been reported to have moved at least some production to Indonesia.
46 Comments
Trump should have imposed these Tariffs two years ago.
You were forewarned, Mr. Cook, by President Elect in a private meeting at the end of 2016. Why did you wait for 2 years to form such a committee? By now, you would have been ready to move production out of China, logistics genius.
The ramifications of trade wars are just beginning to appear: Apple moving production to less efficient / less reliable sources while China is doing the same by moving away from the U.S. and embracing other, more reliable entities.
The potential winner of these things is in no way clear or obvious.
The loser: US! We pay!
The whole U.S. trade war philosophy is based on the assumption that the U.S. is irreplaceable in the world market -- that the U.S. is the center of the world. unfortunately, that is no more true than the belief that the earth is the center of the solar system.
The truth is: The U.S. comprises less than a third of the world's GDP and is very replaceable by the other 2/3's.
We maintain our strength by being the best -- not by being a bully. The world won't fight us. It will just smile and move on.
Good! What took you so long? And in addition to governments in Mexico, India, Vietnam, Indonesia and Malaysia, maybe you should negotiate with some States in the U.S. too.
It’s highly unlikely this is a conversation that’s just coming to the fore within Apple. A lot of groundwork has likely been done since 2016. Just no need to move until now.