Are any iPhones made outside China?

May 1, 2022, 1:45 PM UTC

Apple products are primarily assembled in China, and that’s brought headaches in recent years—including supply-chain woes in its latest quarter. The tech giant should now engage in a rapid expansion elsewhere. Also: A look at last quarter’s results and how the company is slowing hiring at some stores.

Last week on Power On: What to expect from the iPhone 14 later this year.

Apple has apparently advanced its plans to expand manufacturing outside of China, telling contract manufacturer partners that it is aiming to diversify production. This is according to a report posted today by the Wall Street Journal.

Although some of Apple’s products are already produced in countries like Vietnam and India, the vast majority of Apple’s manufacturing takes place in China, at Foxconn and Pegatron facilities.

The Journal says that Apple has been considering geographic expansion plans for a while, but the pandemic put a pause to any immediate changes. However, the recent bout of strict lockdowns in Shanghai has reaffirmed the need to diversify.

China is also risky geopolitically. Its ongoing clashes with the United States on trade is also problematic.

However, it is hard for any other country to compete, as only China is big enough to meet Apple’s huge order requirements. Finding cheap, qualified, labor elsewhere is difficult. The transition to alternative production hubs like India or Vietnam will be slow and gradual. For Apple, this means the supply chain for new products (like the AR headset) will likely be predominantly based outside of China.

Apple production partners like Foxconn have already established facilities in India to help produce iPhones for the domestic market there. A further expansion would see iPhones made in India and then exported for global sale.

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Apple analyst Ming-Chi Kuo is out today with some new predictions on how Apple can continue to reduce its reliance on China. According to Kuo, Apple is adjusting its “supply chain management strategy” in response to the ongoing “de-globalization trend.”

Based on recent supply chain surveys, here’s what Kuo predicts…

The changes include shifting more iPhone production to India, as well as moving more MacBook production and assembly to Thailand. While these moves will take years to complete, Kuo says the US market could be entirely supplied by assembly non-China locations within 3-5 years:

• 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 has faced pressure from many different corners to reduce its reliance on China. The company’s dependence on China has been viewed as a major weak spot in its supply chain, particularly amid COVID lockdowns and geopolitical tensions. Apple has also been criticized for cozying up to China authorities for secret deals and investments in the Chinese economy.

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Chance Miller

@ChanceHMiller

Chance is an editor for the entire 9to5 network and covers the latest Apple news for 9to5Mac.

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