As Apple continues to wean itself off of its reliance on China as a primary source of product manufacture, the company has decided to begin producing certain AirPods and Beats headphones in India for the very first time.
Foxconn and Luxshare are responsible for the majority of the manufacture of AirPods; but, according to a report published today, Apple has reportedly directed both businesses to relocate some of their assembly labor to India.
The difficulty in the situation
The reduction of Apple’s reliance on China as a manufacturing base is one of the company’s most difficult difficulties, but it has also become one of its highest objectives. Apple faces a number of hurdles in this regard.
The fact that Apple picked China as the location of its production base in the first place makes this a particularly difficult task. Beginning in the year 1980, the government of China began to spend a significant amount of effort towards positioning both the country as a whole and the Shenzhen region in particular to become the manufacturing hub of the global technology industry. Its policies include lenient planning laws and generous tax incentives for manufacturers, as well as effective actions to maximize the attraction of international corporations partnering with Chinese businesses. Moreover, it has specific measures to increase the number of foreign companies that partner with Chinese businesses.
Because an extensive network of Chinese suppliers has been built up in and around Shenzhen over a period of 42 years, virtually every component that a technology business would want for its products is easily accessible in the neighborhood, which considerably simplifies supply chains.
According to the findings of a recent study, it would take Apple eight years to cut its reliance on China by only 10%.
But there has never been a time when it was more important.
We have spent a lot of time discussing the immense dangers that come with Apple’s dependency on China, and those dangers have never been higher than they are right now.
A Chinese invasion of Taiwan is currently regarded as a very serious risk for Apple, despite the fact that it may earlier have sounded like an improbable catastrophe scenario. Especially now that Putin has annexed four regions of the country to little more than diplomatic objection, it is likely that the country was encouraged by the relatively weak response of the west to the Russian invasion of Ukraine. This is especially true now that Putin has annexed four regions of the country.
A recent study of US corporations who have manufacturing operations in China indicated no less than ten distinct concerns. These issues range from suspicions that Chinese companies will steal their intellectual property to worries that COVID-19 may be shut down.