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Apple wants to produce outside of China and depend less on Foxconn

The recent problems with Foxconn in China for the production of iPhone push Apple to review its plans and to be interested in a production outside the country. According to Wall Street Journal, the manufacturer has asked its partners to produce more in other parts of Asia, including India and Vietnam. He also seeks to be less dependent on Foxconn, which notably assembles iPhones.

Production of Apple products outside of China

Apple has let its manufacturing partners know that it wants them to start trying to do more production outside of China. According to supply chain specialists, if countries like India and Vietnam are not able to do a new product introduction (NPI), they will remain in a secondary role. However, the slowing global economy and slowing hiring at Apple have made it difficult for the tech giant to allocate staff for NPI-related work with new vendors and countries.

Apple’s long-term goal is to ship 40-45% of iPhones from India, up from single digits currently. According to suppliers, Vietnam is expected to take on a larger share of manufacturing for other Apple products such as AirPods, Apple Watch and MacBooks.

This urge to produce outside of China and reduce its dependence on China comes from several reasons, the most recent being what is happening at the iPhone production plant in Shenzhen with many protests from employees. They criticize China’s zero-Covid policy deemed far too severe and bonuses that have not been paid. Result: production is slowing down and iPhone 14 Pro stocks are at their lowest. Also, sales will be worse than expected this quarter. Apple is obviously not satisfied with this situation, hence the desire to find alternatives.

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