Escaping China: Mexico and Malaysia May Make Apple Products

Escaping China: Mexico and Malaysia May Make Apple Products

Unsurprisingly, Apple is taking part in the production of iPhones (and possibly other products) from China. The clear reason: the trade war with the United States, which is hurting the company and could do even more damage depending on the mood of US President Donald Trump.

This trade war, of course, could pass. But Apple is apparently determined, and other reasons weighed in favor of this decision: the lower birth rate, higher labor costs, and the risk of over-centralizing its production in one country. In other words, the idea of ​​production diversification should have been around Cupertino for some time, but the trade war must have served as a trigger.

China, as we know, has been Apple's production base for two decades. Today, there are only about 5 million jobs that depend on Apple's presence in the country, with more than 1.8 million software and iOS developers in addition to the company's 10,000 employees in the country. And that importance is not changing anytime soon, since such an implementation is not done overnight.

Even more so when we are talking about changing from 15% to 30% of this production, according to Nikkei Asian Review According to the publication, a team of more than 30 people are discussing production plans with suppliers and negotiating with governments for possible tax incentives (taking into consideration local regulations and the business environment) that may attract Ma.

More than 90% of Apple's production is currently in China, but Ma's partners have already confirmed plans to set up operations in India, Indonesia and Vietnam. The Asian vehicle, however, raised the possibility of Mexico and Malaysia also get into play.

Apple's wish will not be easy to fulfill. In the 2000s, China made a major structural investment to accommodate such productions, and perhaps these other possible countries will not be able to create a similar scenario so quickly. Example: Some Apple vendors have already “lost” three to five months evaluating a location and then discovering that there is a risk of power shortages, which of course makes it impossible. Not to mention that after this review and the choice of locations, Apple's partners need at least 18 months to start production at a test pace.

Apple, of course, has not commented on the matter, but apparently the idea of ​​“running away” from China is already a consensus among Cupertino's key executives.