Apple creating China-based supply chain exclusively for local market

Apple creating China-based supply chain exclusively for local market


Apple's relationship with Foxconn on the rocks
Apple is rethinking its supply chain.
Photo: Apple

Apple is reportedly putting together a supply chain consisting of exclusively Chinese manufacturers to build iPhones for the China market.

This is at the same time that Apple is trying to expand its supply chain. That is partly so as to lessen its reliance on China. Apple has also been building iPhones in India which are aimed at the local market there.

According to Digitimes, Apple has encouraged moves by Chinese suppliers Luxshare and Lens Technology to acquire metal chassis plants which are currently operated in China by manufacturers based in Taiwan.

The paywalled report, which was shared by MacRumors, doesn’t appear to provide much more detail about when this might happen. But it could certainly reduce problems for Apple. Tim Cook has repeatedly talked about China being Apple’s future biggest market.

It makes sense that, while Apple would want to lessen its reliance on China for building devices, it would want to keep a supply chain manufacturing foothold in the country. By making iPhones for the Chinese market inside China Apple would also reduce challenges like the recent incident in which components ran into problems while being transferred from China to India.

The question is how many other markets might Apple try and set up localized manufacturing for. The cost of an iPhone built in, say, the U.S. would make it pricier than one built in China. (If the manufacturing infrastructure is there to begin with.) However, this would definitely be a fascinating route to see Apple explore.

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