Apple has known for a long time that its dependence on China is too great.
(Photo: Reuters)
Dusseldorf It was about time: Apple is building a new production site in India next to China. The group wants to get out of the People’s Republic. Hardly any other company concentrates its production as much on the country as the iPhone manufacturer – more than 90 percent of all iPhones, iPads and MacBooks come from China.
Such a concentration is dangerous even for the largest company in the world by stock market value. The lockdowns to combat Covid-19 or the electricity problems in southwest China have significantly hampered production in recent months.
Apple has known for a long time that its dependence on China is too great. With the help of Foxconn, the group opened its first plant in India in the first year in office of US President Donald Trump.
But saying goodbye is anything but easy. Apple needs qualified workers, suppliers have to settle down, the infrastructure has to be right.
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This is partly associated with high costs, which suppliers are reluctant to shoulder in uncertain times like the present one. Also, many suppliers are from China who are reluctant to ship to India – relations between the two countries are poor.
In addition, there can be no question of political stability in India, democracy is less and less in line with our ideas. The plentiful and cheap workforce in India is what attracts Apple, but at the same time social unrest is mounting due to high unemployment.
The infrastructure in India is partly a catastrophe, the bureaucracy immense. The fact that Foxconn in India had to stop production in December because many workers had food poisoning illustrates the challenges.
Google is also moving production of the Pixel 7 from China to Vietnam. But: Next year, Google will release a foldable smartphone. Such a screen with the necessary folding technology is mainly supplied by companies in China who have to work closely on such a new product.
In two decades, the tech industry has built up a dense network of companies in China that have immense knowledge and far-reaching possibilities, from high-tech screws to special machines. This cannot simply be replicated overnight in another country.
Apple must end its extreme focus on China to reduce its dependency. But it’s far from saying farewell to the country. It takes longer.
More: How Apple wants to become less dependent on China with the iPhone 14