iPhone Production in China Will Most Likely Stop

Image source: Paul Hnaoka for Unslpash

According to a recent report, the giant is thinking about moving between 15% and 30% of all iPhone production out of China and therefore asked its major suppliers to analyze the costs. The action is following up the US-China trade tensions, Nikkei reported Wednesday.

As we know, back in May China had announced that would impose a 25% tariff on US goods in as a response against President Donald Trump’s plan on increasing taxes on products imported from China. As a result, analysts believe the cost of iPhones will increase by up to 14% as a result.
On the other hand, Apple CEO Tim Cook “doesn’t anticipate” this increase.

“The Chinese have not targeted Apple at all, and I don’t anticipate that happening, to be honest,” Cook said. “I’m hoping that doesn’t happen … the truth is, the iPhone is made everywhere. It’s made everywhere. And so, a tariff on the iPhone would hurt all of those countries, but the one that would be hurt the most is this one.”

Recently, Nikkei reported that Apple doesn’t want to rely on China that much for its phones regardless if another Chinese tariff doesn’t hit.

“With or without the final round of the $300 billion tariff, Apple is following the big trend of diversifying production,” a source told Nikkei.
We already know that Apple was planning to move production outside of China if the case, and this only confirmed the hypothesis.

Hon Hai Precision Industry, Apple’s Taiwanese manufacturing partner, or Foxconn, are able to support enough iPhones manufacturing to meet the company needs, according to Bloomberg.
Moreover, earlier in June, Foxconn semiconductor division chief Young Liu told investors that 25% of its production capacity is outside the mainland.

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