Coronavirus outbreak exposes Apple’s China reliance as its plans to make iPhone 11 in India failed to take off
A new report reveals Apple’s plans to manufacture iPhone 11 in India never materialized. The coronavirus outbreak is now hurting Apple and others dependent on China for manufacturing and supply.
Dependence on China for manufacturing and supply is hurting the tech companies following the coronavirus outbreak. Apple is no exception. A new report suggests that the company's dependence on China for supply chain isn't going to change anytime sooner. The report also pointed out that Apple did try to manufacture its iPhone 11 in India but it was never implemented.
According to a Wall Street Journal report, Apple's operations executives proposed "as early as 2015" to relocate one of its assembly lines to Vietnam. The move, according to executives, would have helped Apple setup a "multiyear process of training workers and creating a new cluster of component providers" outside China. The plan was rejected by Apple's senior executives.
On India, the report says Apple planned to assemble iPhone 11 but it was cancelled at the last minute. "But the technology giant halted the effort before setting up a single manufacturing line for that device, a person familiar with the matter said. India wasn't ready to supply skilled labor or the robust infrastructure Apple expects. It opted to make the iPhone 11 in China instead," said the report.
The coronavirus outbreak from China as derailed the smartphone industry. The likes of Apple and Microsoft have already lowered their revenue projections for the coming quarter. The situation has led many to raise questions about the over-reliance on China for manufacturing products.
India, in the meanwhile, has been trying to become an alternative to China for manufacturing under a "Make in India" initiative. In this context, Apple already assembles iPhone 7 and iPhone XR in India. The company has bigger India plans which include setting up direct retail stores.
"Apple is unlikely to shift any of the production of its most expensive iPhones to India later this year, a person familiar with Foxconn's overseas operations said. The supply chain isn't in place, and workers in India aren't ready to produce the high-end, organic light-emitting diode models, this person said," added the WSJ report.