Why Apple’s production move out of China won’t happen anytime soon
Amidst the US-China trade war, possible sanctions and increased tax levies, many companies including Apple are looking to move production to other developing countries outside China. However, this change could take a few years to put in place, by the time perhaps a new US president would change the course of the trade war.
Supply chain experts say the production move will take considerable time and effort, including setting up the infrastructure, production trials, labour training and new supply chain resources to name a few. The one positive aspect that would help Apple on this journey would be the fact that many other electronic companies are looking to make similar production shifts to outside China.
Another aspect is that Apple does not own any of the production plants. It outsources the production to third party manufacturers like Foxconn and Pegatron that have extensive networks of production factories in China as well as other countries. Plus, they’ve been urging Apple to move its production to Taiwan.
Considering the taxes and rising labour costs in China, even if Apple does manage to move its production to neighbouring countries, it will have trouble finding skilled workers who have years of experience handling Apple production in these new countries.
While the economic factors of spreading production risk can induce the move, fiscally it may not show any returns—especially if the new production factories mess up Apple’s products in a time where the sales are already on the decline.
Read more details about the feasibility of this move here.
