Apple's plans to move operations out of China are reportedly gaining momentum, with suppliers in other Asian countries being told to prepare for greater involvement in production.
In response to strained supply lines in China, where Fortune outlined over 90% of its products are currently produced, Apple is turning to partners in India, Vietnam and other Asian countries in a bid to reduce dependency on Chinese-based manufacturers.
Citing people close to the matter, the Wall Street Journal suggested the company was no longer “comfortable” relying solely on manufacturers in one place.
This includes Foxconn, which operates a factory in Zhengzhou dubbed ‘iPhone City,’ that has faced violent protests by many of its 300,000 strong work force over pay and Covid lockdown rules.
Following the protests, Apple now faces a shortfall of up to 15mln units ahead of the Christmas period, according to Wedbush analysts, which said the company has “no choice but to make these painful logistical moves now,” as disruption looks set to continue.
Wedbush predicted that 50% of iPhone production could take place in India and Vietnam by 2025 if Apple moves “aggressively,” but this would mark a huge effort given around 98% of the units currently come out of China.
Previously Apple had looked to give bonuses to encourage employees back into work, with a lack of Foxconn production alone threatening a 5% loss of iPhone sales.
But given Covid infections look far from easing in China, Apple faces difficult long term decisions over its production, said the broker.