Apple is slowly shifting its products’ production out of China. And now, a new report from analyst Ming-Chi Kuo has revealed that Apple has started tweaking its “supply chain management strategy” in response to the ongoing “de-globalization trend.”
The company has started iPhone 14 and iPhone 14 Plus production in India and is already eyeing to move start AirPods production in the country soon. In Vietnam, Apple already manufactures a lot of products, and now Kuo says that the company will move MacBook production and assembly to Thailand. Within the next 3-5 years, Kuo predicts that non-China assembly could supply the US market entirely:
- According to Apple’s plan, the Indian company Tata Group may cooperate with Pegatron or Wistron in the future to develop the iPhone assembly business. More than 80% of the iPhones made in India (by Foxconn) are currently to meet domestic demand.
- The potential cooperation of Tata Group and Pegatron or Wistron can accelerate the increase in the proportion of non-China iPhone production.
- The main non-China production site for MacBook in the future may be Thailand. All MacBooks are currently assembled from production sites located in China.
- In the medium term (within 3-5 years), at least the US market (~25-30%+ of global shipments) can be supplied by assembly sites located in non-China to reduce potential impacts from political risks (e.g., US-China tariffs).
- In the long run:
- The non-Chinese markets will be supplied by assembly sites located in non-China, while the Chinese market will be supplied by assembly sites located in China.
- Assemblers can conduct NPI (new product introduction) in China and non-China.
Apple is planning such moves to avoid the effects of the global health crisis and geopolitical conflicts in China on its products’ production. The company has already put in a lot of effort into expanding its production and supply chain beyond China into India, Vietnam, Brazil, and other countries. And now, Kuo predicts that the efforts could intensify even more in the coming days.