As we wrote on Friday night, Apple’s iPhone production relies on shipping parts, especially chips, from Taiwan to China. However, Speaker of the House Nancy Pelosi’s trip to Taiwan left China feeling threatened. The People’s Republic of China (PRC) apparently believed that the “One China” policy embraced by the states was being replaced. Through this policy, the US recognizes that the PRC is China and that Taiwan belongs to the country.
Apple to produce iPhone 14 series simultaneously in China and India for the first time
China, as we noted last night, demands that shipments of chips and other supplies sent to assemblers such as Pegatron and Foxconn (two of the companies that assemble the iPhone and other devices in China) certify that they are from “Taiwan, China” or “Chinese Taipei.” Apple, in a difficult position, is urging its suppliers to play China’s game.
Apple CEO Tim Cook visited the Foxconn assembly line where the iPhone is made
With the iPhone 14 lines about five weeks away from unveiling, 9to5Mac
noted that the man who knows what soup will be served in the Apple cafeteria on this date in 2023, analyst Ming-Chi Kuo, has released a new report. Kuo says Apple plans to start production of at least one of the 2022 iPhone 14 models in China and India simultaneously for the first time.
The TF International analyst pointed out that Apple typically starts production of new iPhone models in China and rolls them off the assembly line in other countries such as India and Brazil after a few months. Do you want an example? (Gosh, what a tough crowd!) Okay, it wasn’t until last April, about seven months later Apple released the 2021 iPhone 13 line, some of which started production in India. A few weeks later, the assembly of the line started in Brazil.
But here’s the most important thing to remember. Apple’s iPhone production in countries other than China is mostly used to meet the demand in those specific countries. In the case of India, Apple tried to avoid a heavy import tax that would make its phones even more expensive in a developing country. Kuo does argue that Indian iPhone 14 production is not for global consumption and would not be able to make up for a short-term shortage in China in any case.
Still, the trusty Kuo says the reason for this decision is geopolitical issues (such as tension between China and Taiwan) that could harm the on-time delivery of chips and other supplies from Taiwan to Apple’s contract manufacturers in China. In addition, Kuo calls the simultaneous production of the upcoming iPhone 14 series in multiple countries an “important milestone for Apple”.
Apple has longed to reduce its reliance on China and it was only a few years ago when the US began collecting import taxes on shipments from China, a misguided policy that the government that ran the country at the time falsely said was a lot of money. raised for the US Treasury. The truth was that the tariffs were paid by US companies like Apple, or worse, US consumers in the form of higher prices.
Vietnam could be the answer
Maybe you remember that somehow the iPhone did not escape the tariff, although it did affect other Apple products imported from China. The reason you might not remember this is due to Apple’s decision to pay the taxes itself in order not to have to raise its prices. But Apple and other US companies that import their products from China must come up with a contingency plan in case China becomes too unstable, or the next US administration will bring those who introduced the tariff and mischaracterized it back to the public.
Apple has certainly explored plans to move production out of China, but it’s not that easy to do. A country must have massive facilities, skilled workers and access to a supply chain. One country that has always emerged as a potential replacement for China is Vietnam. Samsung produces a number of devices in the country and will even start making semiconductors there from next year.
Apple is already making AirPods in the country and will soon be making the iPad in Vietnam along with the AirPods Pro 2 when that unannounced product becomes a reality.