Apple Reportedly Considering Moving Up to 30% of Production Out of China to Diversify Supply Chain

[ArtOfWarfare]

How about russia?

The article is citing low birth rates as a reason to move away from China... China's is 12.3 per 1000 people while Russia's is 12.05 per 1000 people, so worse in that regard. In absolute terms of children born, Russia's population is about 1/10th of China's.

I remember several years ago there was a lot of talk that Apple might start manufacturing in Brazil. Whatever happened to that?

 

[Scottsoapbox]

The tariff costs are making the expense of building new factories in other places now a cost savings measure (vs an added expense before).

 

[RogerWilco]

The article is citing low birth rates as a reason to move away from China... China's is 12.3 per 1000 people while Russia's is 12.05 per 1000 people, so worse in that regard. In absolute terms of children born, Russia's population is about 1/10th of China's.

I remember several years ago there was a lot of talk that Apple might start manufacturing in Brazil. Whatever happened to that?

A decade ago my company tried to do business in Brazil. We quickly learned that it might be simpler and cheaper to open a sales office on the Moon.

 

[xnu]

Did they mention anything about where the new MacPro is being assembled? Just wondering.

 

[TheShadowKnows!]

No but, for the sake of Europe and the US, China's mercantilism has to be stopped or at least cooled down to quite a sizeable point.

Dude. Agree.

But, sadly, purchasing cheap Chinese goods has become an ingrained habit.
Amazon is the standard-bearer. And, like any drug-habit, it will continue unabated.

[It saddens me as how much our middle-class has caved economically when production moved to cheap labor.]

 

[twolf2919]

Tariffs work.

Uh, for who? Did you see the US as one of the potential destination countries?

 

[bluespark]

Sounds reactive rather than proactive. Surprising considering Apple is usually good at diversifying properly.

Shifting Apple's supply chain is like turning an aircraft carrier, so don't worry too much about how this looks from the outside. That said, I'm sure the current sanctions battle added fuel to this fire.

 

[siddavis]

Sorry Donald, no US jobs. Trade imbalance with China will be transferred to other Asian countries instead. BRILLIANT! FINANCIAL GENIUS!

The situation with China is not just (or really at all) about a trade imbalance. China is NOT a friend or ally of the US. This is about protecting IP and capabilities for security purposes.

 

[shanson27]

Designed in California, assembled in Mexico !

 

[kipwheeler]

its about time they built a factory in the us.

You did note the article said Apple was responding by moving production to other Asian countries besides China, not building US factories, right?

Or are you suggesting that Apple *should* start building factories in the US since this article says they are merely moving production out of China to other countries besides the US?

 

[barkomatic]

The article is citing low birth rates as a reason to move away from China... China's is 12.3 per 1000 people while Russia's is 12.05 per 1000 people, so worse in that regard. In absolute terms of children born, Russia's population is about 1/10th of China's.

I remember several years ago there was a lot of talk that Apple might start manufacturing in Brazil. Whatever happened to that?

I think "low birth rate" is coded language that companies use to determine whether a given population has insufficient economic opportunity to accept very low wages. China has been successful at gradually raising the standard of living so Apple wants to move to a place where people are more desperate.

 

[H2SO4]

That's some leap.

That said, I can't stand that yob in the White House but have to say given China's authoritarian government and human rights abuses, I'd be happy to see Apple move production entirely elsewhere.

To where? I suspect in time that they’ll face similar challenges wherever they go.
This is short term. If you’re not prepared to pay your way as an end user, western countries will always ship the labour overseas.
Be surprised if all countries don’t have a Wild Wolves division that exports their human rights abuses to other countries under the radar and we choose to ignore them when it suits us?

 

[jaimewalker]

India. The future of everything is India.

Or maybe, darkest Peru...

Uggh!!! no India please, just tried 3 recent products made in India and i'm having Nightmares!!

 

[IIGS User]

Long time coming.

China isn't the cheap pool of labor it used to be. Add international tensions (like China's saber rattling in the South China Sea, which was going on long before Trump came along) and a totality of other factors, and it just makes sense to have another place to make this stuff.

No one was under the illusion that iPhones were going to be made in the US. It just wasn't happening. But there are less confrontational and more business friendly countries out there with pools of skilled labor to draw from.

This is Just Tim doing what Tim does best. Squeezing everything he can from the supply chain.

 

[Freida]

Not really they are just gonna move production to a different Asian country
[doublepost=1560948803][/doublepost]
Sure everyone would be happy about iPhones being manufactured in the USA when they become something only the wealthy could realistically buy

Why would everyone be happy? Made in USA is not something to brag about and with wages etc. its a no go business. Also, the work ethics in Asia are better than in USA where there is one union after another.
Don't get me wrong, I'm not saying its good to abuse people (thats not what I was referring to above) but there is always a difference in cultural.
Its like in UK where if you have an English builder the job will take longer but if your builder is Polish the job is done much faster. Its all in work ethics & mentality.
Made in USA is no longer viable for most things as it would be a commercial suicide.

 

[Plutonius]

I see the political comments are stacking up. Maybe this thread should be moved to the politics section.

I understand why since it's a political issue.

 

[The Hammer]

Why would everyone be happy? Made in USA is not something to brag about and with wages etc. its a no go business. Also, the work ethics in Asia are better than in USA where there is one union after another.
Don't get me wrong, I'm not saying its good to abuse people (thats not what I was referring to above) but there is always a difference in cultural.
Its like in UK where if you have an English builder the job will take longer but if your builder is Polish the job is done much faster. Its all in work ethics & mentality.
Made in USA is no longer viable for most things as it would be a commercial suicide.

What about Right to work states where unions are under seige?

 

[barkomatic]

Most countries like the US and other western countries have not made the investment in infrastructure and supply chain support to produce on scale. To do so independently can be cost prohibitive. Apple is now of a size and unit volume that supports an ecosystem being built around them. That was not the case just 5 to 6 years ago. Keep in mind they have been testing and doing limited manufacturing in some of these other countries over the last 3 or 4 years, but I’m sure they did not anticipate an unnecessary trade war being waged at their expense.

Specifically, what infrastructure and supply chain investments have these other countries made which are not present in developed countries or which couldn't be created relatively quickly? Some of the places that Apple is considering don't have reliable power in rural areas.

I don't think the issue is infrastructure or supply chain but the fact that companies want to pay very low wages and benefits. If North Korea ever opens up and the sanctions dropped I have a feeling Apple would find a way to get a factory built there within 2 years. The possibility of paying workers 50 cents an hour probably gives Tim Cook some very happy dreams.

 

[lunarworks]

Why not bring it to the US? Oh wait ...

Here's an idea Apple... Why not make your own manufacturing facility, wherever you like?

Sitting on all those billions must be itchy.

The supply chain.

They can build a factory wherever they want, but being close to all the other factories that make all the mundane parts and materials that your factory uses improves efficiency by an incredible amount.

 

[yaxomoxay]

If North Korea ever opens up and the sanctions dropped I have a feeling Apple would find a way to get a factory built there within 2 years.

When NK opens (my bet, 3 to 5 years) companies will run there as fast as they can.

 

[hauntvictim]

Not really they are just gonna move production to a different Asian country
[doublepost=1560948803][/doublepost]
Sure everyone would be happy about iPhones being manufactured in the USA when they become something only the wealthy could realistically buy

Aren't they already?

 

[Gasu E.]

Some locations have better quality control than others. I wonder how this will impact.

"Foxconn" provides quality control; "China" does not provide quality control.
[doublepost=1560954716][/doublepost]

Here's an idea Apple... Why not make your own manufacturing facility, wherever you like?

Idea has been tried innumerable times, and proven to be terrible. Next!

 

[Freida]

What about Right to work states where unions are under seige?

What do you mean?

 

[Gasu E.]

The situation with China is not just (or really at all) about a trade imbalance. China is NOT a friend or ally of the US. This is about protecting IP and capabilities for security purposes.

Yet Donald talks incessantly about the bilateral trade deficit with China. As anyone who has thought about international trade economics for 35 seconds or more would know, bilateral trade deficits mean squat. So we know that Donald has not thought about this for more than 34 seconds.
[doublepost=1560955258][/doublepost]

The supply chain.

They can build a factory wherever they want, but being close to all the other factories that make all the mundane parts and materials that your factory uses improves efficiency by an incredible amount.

It's a good point in general, but it's more important where you have a lot of bulky, hard to ship, low value components, then it is for products made up of lightweight, compact, high-value components.

 

[siddavis]

Yet Donald talks incessantly about the bilateral trade deficit with China. As anyone who has thought about international trade economics for 35 seconds or more would know, bilateral trade deficits mean squat. So we know that Donald has not thought about this for more than 34 seconds.

Definitely agree that bilateral trade deficits mean squat. In fact, having a trade deficit just means that our economy is in a position to consume more (i.e. we have buying power). However, public comments on the matter and the underlying reasons are most likely two different things. How willingly do you think China would come to the table if the public statements were mostly "enemy" and "IP theft"? Sorry, but our president is the first to really try to tackle the issue, and does so risking political capital. Finally someone is willing to stand up for the long term survival instead of just what is good in the short term.