One of the signature achievements of Cook’s career at Apple has been his work crafting its relationship to China, which is unusually positive compared with those of other US tech companies. Over more than two decades, Apple has built a vast manufacturing and assembly operation in the country involving thousands of business partners.
But Apple’s China formula is under its greatest strain in recent memory. Even as Cook was smoothing things over in Beijing [in late March], Apple executives were hard at work developing ties to other countries to lessen reliance on the country, according to multiple people familiar with Apple’s operations who spoke on the condition of anonymity, since they’re not authorized to speak publicly.
Apple’s diversification efforts took on urgency during heightened trade tensions between the US and China under the Trump administration and then intensified during the pandemic…
Apple’s efforts center on India as a location for production of iPhones and accessories, Vietnam for AirPods and Mac assembly, Malaysia for some Mac production, and Ireland — where suppliers currently build the relatively easy-to-produce iMacs — for a range of simpler products. Managers in Apple’s operations department have instructed employees to focus on sourcing additional components and locating production lines outside China for more new products coming in 2024, though the company also plans to retain extensive operations in the country.
Apple’s leadership is concerned that China might retaliate if it moves too much capacity to other countries, or transitions too rapidly. Customers in China could turn against US-designed products amid heightened nationalism.