Foxconn: Apple Has Capacity to Make All US-Bound iPhones Outside of China if Needed

[MadeTheSwitch]

They should move assembly to some South American country. Depending on location, it could be closer so provide less turn around time.

Although what’s to say a trade war can’t be moved around from country to country too?

 

[Ramchi]

But Foxconn is a Chinese based company but apparently Apple also has huge stakes..... assembling iPhones will not be a big issue but sourcing or making its crucial components, otherwise, the difference may not be huge except for the tariff....

 

[MadDawg2020]

In the end China will give Foxconn a pass. They employ too many people.

This statement is just a prelim to give the government a reason for a pass.

It is NOT China that is giving a ‘pass’ It is the US and import tariffs that are the issue.

 

[RogerWilco]

You guys didn’t think a supply chain genius would have all his eggs in China, right?

The same "supply chain genius" that has all of the A12 CPUs made by one company in Taiwan?
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It is NOT China that is giving a ‘pass’ It is the US and import tariffs that are the issue.

Without getting political -- there are two sides to every trade negotiation -- issues are on both sides.

 

[Baymowe335]

The same "supply chain genius" that has all of the A12 CPUs made by one company in Taiwan?
[doublepost=1560276206][/doublepost]
Without getting political -- there are two sides to every trade negotiation -- issues are on both sides.

What's the issue with that? It's one component and could be shifted as well, if needed. Samsung has made Apple A series chips in the past and I'm sure Tim has critical components with contingency. Yes, he's a supply chain genius.

Name someone better. I'll wait. He's widely considered the best in the world.

 

[chucker23n1]

They should move assembly to some South American country. Depending on location, it could be closer so provide less turn around time.

Turnaround is not that big of a concern. Leaving aside wages, the far east has an entire ecosystem of suppliers between China, Taiwan, Japan, Korea and the like. That's not easy to replicate in South America.

 

[Nibo]

If only it were as easily done as it is said. If new tariffs on China start on July 1, it would take Foxconn months to shift production from China to India. Additionally, they would have to retool new factories for the 2019 versions of the iPhone in the midst of the production line move, as I’m sure the retooling process has already started in China. Foxconn is not going to spend all this money without charging Apple for it, and that charge will be enormous.

The new tariffs going in effect on July 1 would severely damage the Apple’s 2019 holiday season sales. There will be a shortage of Indian-made iPhones for the holiday season, and the Chinese made iPhones would be significantly more expensive due to the tariffs.

Let’s hope Tim has negotiated to save Apple from the tariffs, as it won’t be pretty if the Apple products become subject to the tariffs. Tim is playing with fire, being so nonchalant about what may be a serious hit to the future of Apple and being unprepared for what’s about to come even though he was warned about it over 2 1/2 years ago. Had he heeded the warnings then, Apple would have been much better positioned now to weather the trade war with China.

And yet the (point of the) whole article is contradictory to what you believe/said

Tip: apple owns the tools, it’s a matter of changing the scenery
[doublepost=1560282153][/doublepost]

What's the issue with that? It's one component and could be shifted as well, if needed. Samsung has made Apple A series chips in the past and I'm sure Tim has critical components with contingency. Yes, he's a supply chain genius.

Name someone better. I'll wait. He's widely considered the best in the world.

Exactly! And he runs the most successful company in the world as a result. I wonder what all those people criticising him, have to show for on their CVs...

I mean anyone can talk the talk but if you can’t walk the walk also, your opinion doesn’t really matter.

 

[sirozha]

And yet the (point of the) whole article is contradictory to what you believe/said

Tip: apple owns the tools, it’s a matter of changing the scenery

It’s a matter of bad timing. The best time to move production to China would be a January-March quarter, not the July-September quarter. The summer is when the production of the new iPhones released in the fall starts. There is no way to move production to India in the summer and be able to make enough new iPhones by the holiday season. Do you not remember new iPhone shortages before the holiday season just a few years ago? Back then, production stayed in place but logistics were behind the schedule.

 

[RogerWilco]

What's the issue with that? It's one component and could be shifted as well, if needed. Samsung has made Apple A series chips in the past and I'm sure Tim has critical components with contingency. Yes, he's a supply chain genius.

Name someone better. I'll wait. He's widely considered the best in the world.

Samsung (or for that matter any other fab) cannot make the A12 because TMSC has nailed the 7 nm process. Apple is using a sole source for the critical part in all of their new devices. Beyond that, do you really believe Tim Cook still does day-day supply chain work?

 

[AustinIllini]

In the end China will give Foxconn a pass. They employ too many people.

This statement is just a prelim to give the government a reason for a pass.

Right. This is a global economy. I wouldn't be surprised if China, the US come to some agreement regarding tech companies

 

[RudySnow]

Moderator Note:

If you want to discuss the politics behind the U.S.-China trade war, please take it to the PRSI forum.

That’s not a wise suggestion. The trade war is intrinsically intertwined. This forum should just be labeled a PRSI post.

 

[Baymowe335]

Samsung (or for that matter any other fab) cannot make the A12 because TMSC has nailed the 7 nm process. Apple is using a sole source for the critical part in all of their new devices. Beyond that, do you really believe Tim Cook still does day-day supply chain work?

I didn’t say it could happen instantly, but Samsung has supplied the chips in the past and is trying to win back the business with its own 7nm process. Samsung can produce 7nm today and Intel’s 10nm is equivalent to their 7nm. I never said it’s ideal, but Apple has contingencies.

I think Tim Cook does all kinds of daily work. He’s well known the be a workaholic and absolute beast. I think he still manages the supply chain VERY closely, yes.

 

[Nibo]

It’s a matter of bad timing. The best time to move production to China would be a January-March quarter, not the July-September quarter. The summer is when the production of the new iPhones released in the fall starts. There is no way to move production to India in the summer and be able to make enough new iPhones by the holiday season. Do you not remember new iPhone shortages before the holiday season just a few years ago? Back then, production stayed in place but logistics were behind the schedule.

What you say makes great sense and I would totally agree, but the point of the whole article is Foxconn’s statement that that’s not really the case. If they claim the solution is already ready to go, I don’t see the point in contradicting their statement without any evidence to the contrary. What happened years ago is not a valid point, as production practices might have changed since then, lessons learned etc

 

[sirozha]

What you say makes great sense and I would totally agree, but the point of the whole article is Foxconn’s statement that that’s not really the case. If they claim the solution is already ready to go, I don’t see the point in contradicting their statement without any evidence to the contrary. What happened years ago is not a valid point, as production practices might have changed since then, lessons learned etc

What they are saying is a PR campaign that Cook asked them to launch to back him. They are saying they can move production to India, but they are not committing to any concrete timeframe or production output numbers. If this move must happen this summer, Apple will be late to the holiday season with its new iPhone models made in India.

 

[nt5672]

Not clear what you mean - it is the US that will be charging the tariffs - how is China going to “give Foxconn a pass”?

Probably could have said it better. What I mean is that Apple is valued by the US and Foxconn is valued by China and they will work out a deal to not disturb either.

 

[Cosmosent]

Anybody have a good estimate as to how many 2019 iPhones AAPL is projected to sell in the U.S. ?

180M units / year is the consensus WW estimate for ALL iPhones they offer, NOT just their newest.

Generally, 40% will be their newest, WW.

The rest will be older iPhones.

I think Foxconn is saying they can Build up-to 24M 2019 iPhones per year, OUTSIDE of China, if need be, for the U.S. market (to avoid Tariffs).

Seems reasonable.

The math: 180M * 0.4 / 3 = 24M, where the "3" represents the U.S. portion of the total WW market.