Apple, in recent weeks, is accelerating its plans to shift some of its iPhone production outside China and telling suppliers to plan more for assembling the product elsewhere in Asia, particularly India and Vietnam.
According to the Wall Street Journal, the
people involved in the discussions said that Apple is also looking to reduce
the dependence on Taiwanese assemblers led by the Foxconn Technology Group.
The recent turmoil at China's Zhengzhou
'iPhone City' plant may propel Apple to shift its production, according to a
report by The Wall Street Journal. In China, Zhengzhou has as many as 300,000
workers working at a factory run by Foxconn to make iPhone units and other
Apple products. At one point, it alone made up about 85 percent of the Pro
lineup of iPhones, according to market research firm Counterpoint Research.
In late November, protests erupted at the
world's largest iPhone factory in central China as authorities at the Foxconn
plant struggled to contain a COVID-19 outbreak while maintaining production
ahead of the peak holiday season.
In videos protested online, the protesters
were shouting "Stand up for your rights!" Riot police were present,
the videos show. The location of one of the videos was verified by the news
agency and video verification service Storyful, The Wall Street Journal
reported.
After a year of events that weakened
China's status as a stable manufacturing centre, the upheaval means Apple no
longer feels comfortable having so much of its business tied up in one place,
according to analysts and people in the Apple supply chain.
Apple has told its manufacturing partners
that it wants them to start trying to do more of this work outside of China,
according to people involved in the discussions. Unless places such as India
and Vietnam can do New Product Introduction (NPI) too, they will remain stuck
playing second fiddle, say supply-chain specialists.
However, the slowing global economy and
slowing hiring at Apple have made it hard for the tech giant to allocate
personnel for NPI work with new suppliers and new countries, said some of the
people in the discussions, reported The Wall Street Journal.
Earlier in November, problems at the
Foxconn plant led Apple to cut estimates for high-end iPhone 14 shipments and
issue a rare warning to investors over the delays.
China is further scrambling Apple's
strained supply and highlighting how the country's stringent zero-Covid policy
is hurting global technology firms.