Apple / China: Complicated supply chains make hang-ups difficult to do
Breaking up is a difficult thing to do. Just ask Apple. The iPhone maker is trying to reduce its dependence on China, its third most important market and where most of its products are assembled. It has moved the production of some of its products to Vietnam and India after a coronavirus-related outage caused major supply chain disruptions during the pandemic.
However, the reality is that America’s most valuable company is still completely dependent on the Asian nation. Beijing’s resolute adherence to the No Vivid policy means that AppleProblems in China risk becoming a repeat feature.
Video footage of workers from Foxconn, one of Apple’s main suppliers, widening the fence to escape the factory they work in – prison escape style – provides a timely and vivid reminder of what this.
The manufacturing complex in Zhengzhou, known as “iPhone City”, accounts for about 60 percent of Foxconn’s iPhone assembly capacity, according to analysts.
Foxconn said it was prepared production conversion to other plants. The disruption comes shortly after Apple launched the new iPhone 14 and before the important holiday season. According to one estimate, it could affect more than 10% of global iPhone production capacity.
Look at Apple’s third-quarter results and one can avoid the latest supply chain woes. In another terrible earnings quarter for Big Tech, Apple’s revenue growth and profit both topped estimates. But part of this growth was due to production bottlenecks that delayed sales last quarter.
Rising labor costs, a slowing Chinese economy, and growing tensions with the US over trade and Taiwan give Apple plenty of reasons to reduce its reliance on China. To be fair, Apple got many of its components from elsewhere. But the vast majority of its products are still assembled in China
China’s reliable energy network and efficient transportation infrastructure, not to mention its network of local suppliers, make it especially difficult for Apple to stay in the country.
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