Did not realize how much Apple (AAPL) depended on the FoxConn plant in China for its iPhones – 85% of the top-of-the-line production.
Foxconn shipped about $32 billion in products overseas from Zhengzhou in 2019, according to a Chinese government-linked think tank. All told, the Foxconn group accounted for 3.9% of China’s exports in 2021, according to the company.
There were options to diversify. But Apple had not considered them until now
Foxconn has plants in India and Taiwan as well, for example, but getting one up to speed to have hundreds of thousands of employees churn our flawlessly constructed, packed and shipped Apple phones (at the same landed cost) is non-trivial.
Curious that when asked about bringing iPhone production back to the US Steve Jobs said it was impossible because of the lack of supporting vendors such as were found around the FoxConn plant in China. But somehow they’re managing to do it in Vietnam and India?
I’m guessing it has more to do with ‘hourly wage’.
It has more to do with RRE. China leveraged RRE.
The question is how much RRE is now being produced outside of China?
The iPhone is/was Apple’s golden goose. It seems likely that the company leadership was thinking strictly on how to nurture the iPhone ecosystem in China, and didn’t worry too much about country risk as China was a “safe” country. When it stays that way for a long time, people get comfortable and ignore the risk. Until the risk shows up in force - as in, effects of China lockdown, plus worker discontent. Note that chart on delivery times of different iPhone models
China already has an Iphone 14 copy out now.
Well that didn’t take long. I wonder how capable the fake is?