Amaya Toman The trade war that has raged between the United States and China is gaining momentum. As part of it, Apple decided to gradually move outside of China. Key suppliers of the Cupertino company are Foxconn and Pegatron. According to The Financial Times, the two aforementioned entities already started investing in premises and land in India, Vietnam and Indonesia in January of this year.
Server Digitimes reported that Pegatron is now fully prepared to start production of both MacBooks and iPads in Batam, Indonesia, and production should begin next month. The subcontractor will be the Indonesian company PT Sat Nusapersada. Pegatron had also planned to start the operation of its own factory in Vietnam, but in the end decided to invest 300 million dollars in the reconstruction of the premises in Indonesia.
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Moving production out of China could help Apple avoid import tariffs that China raised to 25% on the United States earlier this month. This step is also intended to protect the company from possible sanctions that could arise from the Chinese government as a result of the aforementioned trade war. The recent embargo that the US government decided to impose on the brand's products, Huawei, has increased opposition to Apple in China, as part of which many residents there are ostentatiously getting rid of their iPhones and switching to the domestic brand.
The weak sales of iPhones in China, which Apple has been struggling with since last year, will not really be solved by this move, but the transfer of production is necessary because of a possible embargo that the Chinese government may impose on Apple products in the country in retaliation. That could cut Apple's global revenue by as much as 29%, according to Goldman Sachs. In addition to the ban on the sale of iPhones in China, there is also the threat of making the production of Apple products significantly more difficult - the Chinese government could theoretically achieve this by imposing financial sanctions on factories where production would take place.
China has become a global center for technology manufacturing over the past two decades, but even before the start of the trade war with the United States, many manufacturers began to look to other markets due to the decline of the Chinese economy.
Source: iDropNews
Well, I'm after the birds. After Apple, a bunch of companies will do it. I'm going to have to tighten my belts.