apple china production

A special Apple team has been commissioned to investigate the costs of moving between 15% to 30% of iPhone, iPad, and AirPods production to other countries in order to reduce the impact of U.S.-China tariffs.

A team of 30-40 people at Apple is examining the company’s main suppliers on the cost implications of moving production from China.  Nikkei Asian Review reports that several major suppliers have confirmed that Apple has asked them to look into the situation.

Key iPhone assemblers Foxconn, Pegatron, Wistron, major MacBook maker Quanta Computer, iPad maker, Compal Electronics, and AirPods makers Inventec, Luxshare-ICT and Goertek all have been asked to evaluate options outside of China, multiple sources say. Many other Apple suppliers such as print circuit board and casing providers are closely monitoring where these major assemblers would shift their production.

It is claimed that 90% of all Apple products are assembled in China. The team, formed at the end of 2018, speaks specifically with suppliers that assemble iPhones, iPads, AirPods, and MacBooks. Specific suppliers include Compal, Goertek, Foxconn, Inventec, Luxshare, Pegatron, Quanta, and Wistron.

The publication also says that Apple has a “sense of crisis” compared to the U.S.-China trade dispute. It claims that Apple is particularly concerned about the sanctions China could impose and how this could force the company to raise prices in the U.S.

Reportedly, the Apple team is also negotiating with local governments on the security of preferential terms for those suppliers. According to Nikkei sources, the team intends to negotiate with governments in Mexico, India, Vietnam, Indonesia, and Malaysia.

The news from the Apple team comes shortly after Foxconn announced that it would be able to move iPhone production from China if Apple ever asked.

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