Posts Tagged → manufacturing

Apple Dodges Another Bullet

Over the weekend, we learned that smartphones and computers are now exempt from the latest tariffs. U.S. Customs and Border Protection (CBP) confirmed that smartphones, computer monitors, and various electronic components are among the exempted items. This means Apple has dodged another bullet — again.

This news is clearly good for Apple and for us as customers in the short term. However, it’s also a flashing red warning for the future. Apple currently assembles over 90% of its iPhones in China. That represents an enormous concentration of risk in one country. That’s too much for any company, and certainly too much for a company shipping hundreds of millions of devices annually to customers worldwide.

I fully acknowledge that moving iPhone manufacturing out of China isn’t as simple as flipping a switch. Apple has spent decades meticulously building that supply chain, a masterpiece of logistics and precision manufacturing. But global trade dynamics are evolving rapidly, and Apple can’t afford to stand still. This isn’t about politics; it’s about resilience.

Apple has executed Herculean efforts before. Now is another moment when they must rise to the occasion. Diversifying their manufacturing base might be the single most critical long-term move they can make right now. (That sentence was difficult to write because I also believe they need to fix their Siri/AI issues. But ultimately, they need to ship iPhone devices regardless of their current limitations.)

Apple’s Increasingly Diversified Manufacturing

A significant part of the formula that brought Apple from a near-bankrupt company to a trillion-dollar one was its relationship with Chinese manufacturing. Through China, Apple developed and sold the iPod, iPhone, iPad, and Mac. At the same time, few things could more effectively cripple Apple than problems with manufacturing, and for a long time, all their eggs were in one basket.

However, Apple seems to have got the memo. I suspect disentangling itself from China as its sole manufacturing partner was not easy or trivial, but we are starting to see results on the outside. Recently, we discovered they will be manufacturing MacBooks in Vietnam next year. They are also now manufacturing in India and Indonesia (in addition to China). Apple is increasingly spreading out its manufacturing among multiple countries.

Apple hasn’t said much about this, and I expect they won’t. I hope they aren’t going to stop with the existing countries. There is too much at stake. I’ll be surprised if Apple’s global manufacturing diversification doesn’t look a lot different in five years.