Source: Bloomberg
Author: Mark Gurman
At the end of March this year, Apple CEO Cook's first visit since the outbreak of the epidemic in China, saying that it is not an exaggeration to say that it is a high -level diplomatic visit.Cook took his colleagues to Apple's specialty store in Sanlitun, and also met with senior government officials to discuss Apple's business operations.At the Chinese Development High -level Forum, he said to the participants, "I believe this symbiotic relationship is enjoyed by both of us."At the same time, Cook also announced that it will expand a millions of dollars in rural education projects in China.
One of the most iconic achievements in Apple is to create a good relationship with China, which is quite rare in American technology companies.In the past 20 years, Apple has established a huge manufacturing and equipment center in China, with thousands of business partners.So far, Apple has opened more than 40 stores in mainland China. Nearly 20%of the company's income comes from Greater China, including Hong Kong and Taiwan.
But Apple's Chinese model is now facing tremendous pressures that have never been in recent years.It is understood that the apple business knows that some people have heard that Apple executives are developing contact with other countries to reduce the company's dependence on the Chinese market.The source asked anonymous because of the unauthorized public speech.Apple refused to comment on the matter.
During the Sino -US trade war, Apple had faced the urgent pressure of a diversified market, and this demand became more urgent when the epidemic broke out.In 2020, Cook stated at the annual meeting that after the epidemic, it would only make a slight adjustment of the supply chain, but it was obvious that the actual situation was far from being so lightly written.
Apple's efforts are mainly concentrated in India, Vietnam, Malaysia and Ireland.Its positioning of these places is: India's iPhone and other accessories, Vietnam assembled AirPods and Mac computers, Malaysia's production part of MAC computers, Ireland supplies IMAC and other relatively easy -to -produce products.The director of the operation department of Apple has instructed employees to focus on purchasing more components and establish a production line outside China in order to launch more new products in 2024. However, the company also plans to retain its extensive operation in China.
With the direct participation of Cook, Apple also convened hundreds of employees to establish an organization called the "Tiger Team" by insiders to solve the weakness in the supply chain.Not only that, Apple has also established offices in supplier factories in China and other countries to evaluate the maintenance arrangements of the equipment to formulate a more comprehensive list of preparatory suppliers for each parts including screws.Apple is still working to improve the prediction capabilities to make more accurate estimates on the possible supply shortage.
In addition to the mainland, Apple is also studying reducing dependence on Taiwanese chip manufacturers. It is mainly due to concerns about geopolitical tensions in Taiwan. However, Apple started late in this area.Starting next year, Apple is preparing to purchase a small number of chips from TSMC's Arizona factory.Because there is currently no alternative to the production capacity of Taiwan's chip, for Apple, changing the origin of the chip is much more difficult than the migration and assembly line.Moreover, according to a person familiar with the matter, if the output of Taiwan's chip decreases, Apple may take nearly a year to promote the rebound of parts and components.
Apple's behavior adheres to the principle of caution.The company's leadership is worried that if too much production capacity or transfer to other countries is too fast, Beijing officials may impose revenge on Apple.In the case of high nationalism, Chinese consumers may resist the goods.In addition, Apple is also worried about whether Vietnam and other countries can ensure high -standard production quality, and they are particularly not assured of Malaysia.
There are also subtle power games inside Apple, and the tasks and goals of different teams are very different.For example, the team of procurement parts, their task is to find necessary parts and components around the world, but establishing a production work process in the new geographical location requires responsible for manufacturing teams to handle. The task of this team is to allocate a lot of manpower andFinancial resources to establish a new assembly production line.If potential quality and functional lack of quality and functional are caused by production abroad, Apple's product development team may oppose overseas production lines.A person familiar with the matter said that Apple would have to make a weighing house between diversification and engineering.
Apple's internal test of the migration of manufacturing and assembly business has been carried out for more than ten years.In 2012, the company cooperated with Foxconn, the largest agency to produce some iPhone in Brazil to avoid tariffs on imported goods.In the second year, in order to cope with domestic political pressure, Apple began to produce Mac Pro at Weinchi in the Texas factory.But neither these two projects were promoted later.Apple has reduced the production of Mac Pro in the United States, and now it is only symbolic assembly of the product in the United States.
A longer -lasting transition began in 2017, when Apple began to produce some low -end iPhone in India.Overall, Apple did not weaken the connection with China at the time.A analysis of Bloomberg Industry research found that from 2017 to 2020, the number of Chinese suppliers in Apple increased, and the number of suppliers in other countries decreased.
When the crown disease epidemic broke out, the apple was basically safe, but as the epidemic continued, the challenge began to accumulate.In 2022, the company's most important project encountered serious delay and accessories.Due to the outbreak of the epidemic, the GTC computer factory was suspended, and the updated version of the MacBook Air was postponed for a few weeks before release.The Foxconn factory, which mainly produces iPhone 14 Pro, has also been closed for a variety of reasons. The supply chain problem caused by various reasons has been delayed until 2023.In the 2022 holiday season, Apple's revenue declined again, which is the second time the company has appeared in the iPhone since the launch of the iPhone.
The problem of Foxconn highlights the risks that the supply of comprehensive interruptions is comprehensive, which will test the ability of Apple to continue to produce products, and also proves that the plan of the existing diversified production site is a wise choice.Apple's most ambitious solution is India. The company plans to produce iPhone, AirPods and Apple Pencils, and iWAD, iPad and MAC accessories with many partners in India.Apple has invited the three main assembly partners from Taiwan to produce facilities in India.Recently, Apple has also introduced another important supplier TATA in India, which is responsible for the production of the iPhone shell and finally assembled the entire product.
In 2022, more than 6.5 million iPhone produced in India was produced in India.Apple's goal is to increase India's output to 10 million units by 2023.People participating in the plan believe that this number may exceed 15 million units next year.Some people believe that if according to the most aggressive timetable, by 2025, Apple may increase India's output to 25 %.According to people familiar with the matter, Apple also shifted the production of iPad and iWatch to India for preliminary discussions, but it was unlikely to be implemented in the short term.
