Apple to gauge cost implications for moving some production from China
By Akshay Kedari  Date: 2019-06-21

Apple to gauge cost implications for moving some production from China

China is a major market for Apple as it secured 18% of its total revenue from the country in last quarter

Technology giant Apple has reportedly been preparing to restructure its supply chain and has requested its key suppliers to evaluate the implications and cost of shifting around 15 to 30% of production capacity from China to Southeast Asia.

Citing multiple sources, unresolved dispute over the Sino-U.S. trade has led to the company’s request, however, a trade resolution now shall not alter the decision of the company.

Apparently, there is a great risk for the iPhone maker for heavily depending on manufacturing in China. Fitch, a credit rating agency, said that Dell Technologies Inc., HP Inc and Apple are the companies who have a higher probability to be blacklisted by China in retaliation for the restrictions imposed on Huawei.

According to reliable sources, companies like Foxconn, Wistron Corp and Pegatron Corp that are key iPhone assemblers, Compal Electronics Inc. that makes iPad and Luxshare-ICT, Goertek and Inventec Corp that make AirPods have reportedly been asked to look for options outside of China.

India, Indonesia, Vietnam, Malaysia and Mexico are the few companies that are being considered, out of which Vietnam and India are among the favorites for smartphones, sources indicated.

Wedbush Securities’ analysts said that Apple could move 5%-7% of its iPhone productions to India by next 12-18 months. Considering the complexity and logistics involved, a minimum of 2-3 years would be required for 15% of iPhone production to move from China to other regions.

Seemingly, China is a major market as well as vital production center for Apple and its devices. The company reportedly gathered nearly 18% of its total revenue from China during the quarter ended March.

Sources said a group of over 30 people have been dispersed from Apple’s capital studies team to negotiate plans for production with the governments and the suppliers over the monetary incentives which could be offered to lure Apple manufacturers.

 

Source credit- https://www.reuters.com/article/us-apple-china-restructuring/apple-explores-moving-15-30-of-production-capacity-from-china-nikkei-idUSKCN1TK0XN

About Author

Akshay Kedari    

Akshay Kedari

A qualified computer engineering graduate, Akshay Kedari takes pride in having his way with words. Following his passion for content creation, he writes insightful pieces on aeresearch.net and a few other portals. Also endorsed with a short-term experience in web deve...

Read More

More News By Akshay Kedari

Telus Communications selects Nokia to deliver 5G services in Canada
Telus Communications selects Nokia to deliver 5G services in Canada
By Akshay Kedari

According to reliable sources, Nokia Corporation has reportedly been selected by Canada-based Telus Communications Inc. to provide 5G services in Canada. The Finnish multinational technology giant will reportedly support the Canadian mobile service o...

TBI, Oracle to jointly launch cloud-based vaccine management system
TBI, Oracle to jointly launch cloud-based vaccine management system
By Akshay Kedari

Tony Blair Institute (TBI) and Oracle have recently introduced cloud technology to Africa for effective management of public health programs in the region. As per credible sources, initially, Ghana, Sierra Leone and Rwanda will use the new Oracl...

Minerva Bunkering unveils ADP for better clarity in bunker deliveries
Minerva Bunkering unveils ADP for better clarity in bunker deliveries
By Akshay Kedari

Swiss supplier of marine fuels Minerva Bunkering has reportedly introduced an innovative solution called Advanced Delivery Platform (ADP) in a bid to increase efficiency and transparency during bunkering operations. According to reliable sources, Min...

TestGorilla secures $1.2M in CapitalT-led pre-Series A funding round
TestGorilla secures $1.2M in CapitalT-led pre-Series A funding round
By Akshay Kedari

In a pre-Series A funding initiative led by a consortium of international angel investors and CapitalT, pre-employment testing software player, TestGorilla, has reportedly secured an amount of USD 1.2 million. This announcement comes amid TestGorilla...

AEGIS Hedging acquires Nexidus Commodities, debuts in metal hedging
AEGIS Hedging acquires Nexidus Commodities, debuts in metal hedging
By Akshay Kedari

AEGIS Hedging Solutions a leading company offering technology and expertise for commodity and rate hedging, has recently announced the acquisition of a renowned commodity trading advisor and pioneer in metals hedging, Nexidus Commodities. Speaking o...