Assembled in china iPhone. Apple’s dependence on China reduced to 36%, but…

iPhone: “Made in China. India?”

I always try to live by the framework of “strong opinion, weakly held”. That’s how I treat all my thoughts shared on Interconnected. I write, not just to share what I know, but also to learn from others, absorb new information, and update my thinking.

Back in March, during the height of the coronavirus pandemic, I wrote a piece called “Is Leaving the China Supply Chain a Pipe Dream?”, where I shared my skepticism of how quickly and how much Apple’s manufacturing would “decouple” away from China to India. It looks like that shift is happening faster than I’d thought, with the newest iPhone 12 possibly being assembled in India as early as 2021.

Time to update my thinking, dig into what’s driving this shift, and what I missed from before.

Taiwan

While geopolitical narratives have always influenced the conversation around supply chain decoupling, they are usually in the context of the so-called “major-country” relations between the US and China. One element that has always been important, but hasn’t been prominent until recently is Taiwan.

I have written quite a few posts about Taiwan’s dominance and strategic importance in the semiconductor industry, almost becoming the global single point of dependence. What I failed to realize is how important Taiwan is in Apple’s supply chain, and how that is being impacted by the recent deterioration of the triangle “romance” between China, the US, and Taiwan.

Although it’s well known that the bulk of Apple’s manufacturing is in China, the companies who run those manufacturing plants are mainly Taiwanese.- Foxconn, Pegatron, Wistron. When geopolitical relationships are stable (not necessarily good, just stable), manufacturing in China as a Taiwanese outfit to supply American tech companies, is straightforward enough. However, stability is no longer the default when it comes to Taiwan.

Just in the last few months, a US cabinet secretary conducted an official visit to Taiwan (the highest level visit in four decades), President Trump submitted proposals to sell advanced weapons to Taiwan (1.8 billion of which was just approved), and DC’s policymaking circle is openly talking about updating the US’s position on Taiwan from “strategic ambiguity” to “strategic clarity” (“clarity” here means if China attacks Taiwan, the US will definitely intervene, as opposed to an angry face and shrug emoji).

Also in the last few months, Foxconn announced a 1 billion USD investment in expanding its factory capacity in southern India. Pegatron registered its own Indian subsidiary a few days after Foxconn’s announcement. Wistron, which already began assembling lower-end iPhones in 2017, plans to hire 10,000 more Indian employees to make iPhone 12.

Of course, there are business motivations to make these investments too, which we will discuss later. Taiwan’s geopolitical significance is just one of many factors at play. As I wrote in the most recent Interconnected Weekly issue, “we shouldn’t over-apply geopolitics to explain everything.”

But with geopolitics in flux everywhere, and especially between the US and China, no one really knows what the rules of the game are anymore. For these giant Taiwanese manufacturing companies, some geographical diversity and redundancy away from China to India seems prudent.

A New Tariff World

The worldwide erection of tariffs has been underway for the last four years, between US-China, US-EU, US-Canada, etc. The impact of these tariffs on things like farm goods are straightforward, but more convoluted when it comes to consumer electronics, with components and assemblies from a variety of regions.

What I failed to think deeply about before was that even in a tariff-filled world, it’s not necessary to make wholesale shifts away from China to circumvent them to keep a product’s cost low. If you know which batch of products are being sold to a tariff country, just shift the manufacturing of those products to a non-tariff country!

A crude, hypothetical example: if iPhone 12’s with serial numbers 1, 2, and 3 are ordered by American customers, make sure those iPhones are made and assembled outside of China.

(This example obviously does not apply to current conditions, because Tim Cook has been deft at maneuvering the Trump administration to make sure Apple products are exempt from the latest presidential tariff temper tantrum, but you can extrapolate this to all other electronics with a heavy supply chain reliance on China.)

So far, the beneficiaries of these “partial decouplings” are Mexico, Vietnam, and of course India. The benefactors are not just American companies, but any company (Chinese, South Korean, Finnish, pick your favorite country) that seeks to avoid tariffs when selling their products to either the US, China, the EU, or any country with a tariff problem.

Now, there are legitimate concerns about how these middle-income countries can rise to the occasion. The overall manufacturing quality, support infrastructure, density of component suppliers, and labor cost versus skills tradeoffs (comparable Indian workers cost about 75% less than their Chinese counterparts) are all poor compared to China. There are other hard constraints like availability of land to build more factories, as well as local government regulations. China’s powerhouse status as the world’s manufacturer did not materialize overnight, thus it will take many years for any country to develop into a full-fledged alternative.

However, this move doesn’t need to be wholesale, but just enough to offset the impact of tariffs on cost while maintaining product quality.- a complex dance that more and more electronic brands and their contract manufacturers will have to figure out. I think that’s partly what’s driving Apple’s manufacturing shift to India, as well as circumventing India’s own tariffs in order to grow in its domestic market (more on that in the next section).

As this graphic by Reuters shows, Apple’s slow, methodical manufacturing shift has been happening for the last five years:

If these tariffs are here to stay, regardless of who wins the American presidency, I see a “balkanization of the supply chain”, where manufacturing capacities are replicated in certain countries that can both circumvent export tariffs and have a large enough domestic market to sell to, in order to make the redundancy worthwhile.

India most definitely has a large enough domestic market.

India: Apple’s Next Story

The final piece of Apple’s shift to India is to position the country as its next growth story. Currently, Apple’s smartphone market share there barely registers; close to 90% of the market is split up between Xiaomi, Samsung, Vivo, Oppo, and other players.

But if we dig into the footnotes, there’s more optimism for Apple. In the “ultra-premium” segment (defined as phones that cost ~600 USD), Apple has a 55% market share. It also grew 78% year-over-year (albeit from a tiny base), driven by strong shipments of the iPhone 11. This growth will only continue, as Foxconn begins assembling iPhone 11’s in India and Wistron prepares to assemble iPhone 12’s next year, all of which will remove the 22% in import duty imposed by the Indian government. This means more affordable new iPhones, not just the cheaper ones, for India’s humongous consumer market that is bound to get richer over time.

With its main markets.- the US, EU, China.- all fully matured or declining slightly, India has to be Apple’s next growth story. And Apple has the cash and patience for India to grow. Even though the country has been on a growth trajectory for decades, its GDP per capita is still roughly half of China’s.

Not only will personal income have to increase, India’s government and institutions will also have to mature. Despite being the world’s largest democracy, India is laden with corruption and lacks strong campaign finance regulations (no one ever said democracies can’t be corrupt). On Transparency International’s Corruption Perceptions Index, India is ranked 80 out of 180 countries with a score of 40 out of 100 (coincidentally the same score as China’s).

The Ministry of Electronics and Information Technology’s production linked incentive (PLI) plan is an interesting way to localize production and boost income growth. How it works (simplistically explained) is an incentive of up to 6% on all incremental sales of all electronics priced at Rs 15,000 (~200 USD) or more. An iPhone would certainly qualify. Coupled with its strong, nationalistic “Make in India” initiative, not unlike “Made in China 2025”, I believe India’s manufacturing capabilities will improve to handle more iPhones and other high-end consumer electronics.

How fast India can get there will depend on its officials staying true to the mission with integrity and not being seduced by the largess and power of top-down government programs.- and more than a few clever tweets from a Minister.

但随着各地地缘政治关系的不断变化，尤其是在中美之间，没有人真正知道游戏规则到底是什么了。对于这些台湾制造业的巨头来说，从中国移到印度，增加一些地理上的“多元化”和冗余似乎还是谨慎之举。

有关税的新世界

目前来看，这种“局部脱钩”的受益国是墨西哥和越南，当然也包括印度。而受益的公司不仅仅来自美国，也包括向美国、中国、欧盟或任何有关税问题的国家销售产品时寻求避免关税的所有公司：中国公司、韩国公司、芬兰公司，随便选一个您喜欢的国家的公司。

正如路透社的这张图所显示的，苹果缓慢而有条不紊的产业链转移在过去五年内一直在进行：

如果关税会一直存在下去，不管谁是下一位美国总统，我觉得未来很可能是个 供应链巴尔干化的时代，各个阶段的制造能力会被复制到某些国家，这些国家既能避免关税又有足够大的国内市场可以发展，既而支持这种复制的必要性和长期价值。

印度: 苹果的下一个增长故事

但如果我们深挖一些细节，其实苹果还有很多值得乐观的地方。在 超高端 消费层里（定义为售价约600美元的手机），苹果占据了55%的份额。在iPhone 11的强劲推动下，苹果同期比增长了78%（尽管基数很小）。这种增长只会持续下去，因为富士康已经开始在印度组装iPhone 11了，纬创也准备明年组装iPhone 12，这些举动都将消除印度政府征收的22%进口税。这意味着面对印度庞大的消费市场来说，将有更多价格实惠的新iPhone，而不仅仅是低档iPhone，被卖给消费者。随着时间的推移，印度的消费者也必将变得更加富裕。

不仅个人收入要增长，印度的政府和有关机构也要成熟起来。尽管印度是世界上最大的民主国家，但却腐败丛生，缺乏强有力的大选募资监管（没人说民主国家就不会腐败）。在Transparency International，一个国际反腐非政府组织的Corruption Perceptions Index中，印度在180个国家中排名第80，仅得40分，满分100分（凑巧与中国的得分一样）。

印度的电子和信息技术部最近出炉的“生产挂钩激励计划”（production linked incentive，PLI）是一套值得关注的、可以实现生产本地化又促进收入增长的政府计划。简单解释一下，这套计划的运作方式基本是对所有价格在15,000卢比（约200美元）以上的电子产品的所有增量销售额给予最高达到6%的奖励。iPhone当然肯定符合这个条件。再加上印度强势的、富有民族色彩 印度制造 计划（与 中国制造2025 并无二致），我相信印度的制造能力会得到提高，可以吸收和组装更多的iPhone以及其他高端电子产品。

我看好印度的未来，但它不会替代中国，而会是中国以外的另一个强国。在10年的时间段里，如果您看好苹果，那您必须看好印度。如果您看好印度，那也就必须看好苹果。

Interconnected

Internet’s only bilingual newsletter on the intersections of tech, business, investing, geopolitics, and US-Asia relations. New post every week by Kevin Xu (@kevinsxu)

Apple’s dependence on China reduced to 36%, but iPhone remains hugely exposed

Apple’s dependence on China has never been brought into sharper FOCUS than now, with COVID-19-related disruption at the biggest iPhone assembly plant costing the company an estimated billion dollars per week.

A new report says that the company’s efforts to diversify production have continued to make progress, but that iPhone production remains hugely dependent on China …

Background

We’ve been warning for many years about both the need and the difficulty of reducing Apple’s dependence on China, but the pandemic made even clearer the risks of the company having most of its manufacturing eggs in one basket.

While Apple has been expanding production into other countries, recent estimates suggest that 95% of the total iPhone supply still comes from China – and around 80% of all iPhones are made in a single plant in Zhengzhou, aka iPhone City.

Massive disruption at this plant has led to iPhone production being reduced to as little as 20% of planned output. One estimate suggested that lost output amounts to more than 20M units. Worst hit has been the iPhone 14 Pro, where the gap between supply and demand is so great that became impossible to guarantee delivery in time for Christmas even for orders placed in mid-November. This is estimated to have cost Apple 1B per week in lost iPhone revenue.

Apple’s dependence on China reduced

Apple has been working for many years on diversifying its supply chain, with assembly plants in India, Vietnam, Indonesia, and elsewhere. Reuters reports that the company has so far succeeded in reducing the percentage of production sites in China from 44-47% in 2019 to 36% in 2021.

The data shows how a diversification drive by Apple and its suppliers, with investments in India and Vietnam and increased procurement from Taiwan, the United States and elsewhere, is reshaping the global supply structure, although analysts and academics say it will remain heavily exposed to China for many years to come.

“The China supply chain is not going to evaporate overnight,” said Eli Friedman, an associate professor at Cornell University who studies labour in China. “Decoupling is just not realistic for these companies for the time being,” he said, although he expected diversification to accelerate.

But the iPhone remains dependent on China

However, the iPhone in particular remains massively dependent on China, and Apple’s plans are still relatively modest given the scale of the risks.

J.P.Morgan expects Apple to move about 5% of iPhone 14 production to India from late this year and to make one in four iPhones in India by 2025 […]

The Apple supplier data to 2021, however, shows no locations so far that stand out as substantial gainers to match China’s decline, according to the Reuters analysis […]

“Vietnam and India are not China. They can’t produce at that scale, at the quality and with the turnaround time, with the reliability of infrastructure,” said Cornell University’s Friedman.

In addition to the disruption and political risks, the recent protests at Foxconn’s plant in Zhengzhou have highlighted poor working conditions during the lockdowns. With human rights activists increasingly drawing attention to the human cost of Chinese manufacturing, Apple is now facing growing pressure from investors to address the problems.

“The important thing is that the company implements these orders in a way which respects people’s rights,” said Pia Gisgard, head of sustainability and governance at Swedbank Robur, which held Apple shares worth around 1.3 billion as of end-September according to Refinitiv data.

You’re reading 9to5Mac — experts who break news about Apple and its surrounding ecosystem, day after day. Be sure to check out our homepage for all the latest news, and follow 9to5Mac on and LinkedIn to stay in the loop. Don’t know where to start? Check out our exclusive stories, reviews, how-tos, and subscribe to our YouTube channel

No to China 2023

Update 12/4/22 – There was a flurry of people on today retweeting out this article with the clickbaity title “Apple Makes Plans to Move Production Out of China”.

It seems that the China government’s atrocious COVID lockdown policies in Zhengzhou (site of Foxconn’s “iPhone City” manufacturing plant) resulted in Apple finally realizing that it needs to diversify its supply chain. According to the WSJ article, iPhone City had at one point alone made 85% of iPhone Pro models.

The Tweets were followed by a lot of high-fiving and Комментарии и мнения владельцев like “it’s about time”. I was excited at first myself–according to the article, Apple is accelerating its plans to manufacture iPhones outside of China, mainly in India and Vietnam.

But there’s one line I read that I found chilling.

A lot of people don’t understand the world of smartphone and laptop manufacturing. The way it works, a contract manufacturing company called an Original Equipment Manufacturer (OEM) gets the contract from Apple, and they’re responsible for building the manufacturing plants to make it. For years, Apple has relied solely on Taiwan-based OEMs like Foxconn and Pegatron. Foxconn and Pegatron, in a move that looks increasingly foolish by the day, decided to go all-in on China to build their manufacturing plants, so they could enjoy cheap labor and not have to learn Vietnamese or Hindi. Foxconn would the bulk of the profits (taxes on which would be paid to the Taiwanese government), and the local employees in China would receive a smaller cut.

What the Wall Street Journal article is saying is that Apple is not telling Foxconn to expand manufacturing to countries like Vietnam and India—Apple is “diversifying” to include China-based OEMs, who presumably will all be looking to set up manufacturing operations in those countries.

I’ll give you a simplistic example of what this means.

Let’s say today that Taiwan-based Foxconn gets 80% of the profits and 20% goes to local operations in China.

If what the Wall Street Journal is saying is correct, it means moving forward, China-based companies like Luxshare and Wingtech will get 80% of the profits and 20% would go to local operations in India or Vietnam. In other words, if a year from now you buy an iPhone that says “Made in India” or “Made in Vietnam”, it’s likely that even MORE of the profit from the price you pay will go to China, the Chinese Communist Party, and the People’s LIberation Army compared to today. And MUCH less will go to Taiwan to defend themselves.

I hope the people celebrating will take the time to understand all this. Clearly, The 275 billion that Tim Cook poured into China established intricate relationship that may never be able to be untied.

Update 9/21/22 – It’s amazing how quickly the rumors on Apple’s attempts to divest from China are coming in these past few weeks. The latest rumors from JP Morgan analysts are that Apple intends to manufacture as much as 25% of all Apple products outside of China by 2025 (they’re at 5% currently). Even better, it’s Taiwanese vendors who are playing a key role in relocating to India and not continuing the trend of the last 20 years of feeding the hand the bites them.

I’ll believe it when I see it–as I said, Tim Cook’s 275 billion investment in China is not going to be an easy thing to extricate Apple from. If you need a smartphone today, go with Samsung.

Update 9/8/22 – Apple just announced the new iPhone 14. It was an announcement I’d been anticipating–and dreading. Would Apple double down on using China as its manufacturer for iPhones, despite the China government’s increasing draconian control over its population–including forced lockdowns when someone comes in contact with someone else who has the sniffles? Or would it FINALLY start to diversify its supply chain so that it’s not reliant on a dictatorial power?

As I expected, the answer was nebulous. It’s clear that Apple has been trying to loosen its ties with China, but that’s no easy task. The 275 billion that Tim Cook “invested” in China had the effect that anyone with common sense would have seen clearly. China was able to establish a monopolistic hold on all aspects of manufacturing.

There are some glimmers of hope. To India’s credit, they were able to pass laws that the corrupt United States could not in limiting China’s manufacturing footprint. Bloomberg reported that Apple and FoxConn are going to attempt to ramp up its production in India–up to now most India production was gone to serve the India market, but let’s hope some of them make it to other markets.

The last paragraph of this article is chilling in how ignorant the reporters are. “India’s workforce and factories haven’t easily adopted the highly controlled practices that Apple requires from supplies”. What this really says is this: Apple and the Chinese Communist Party share the same approach to ensuring efficiency among their manufacturing workforce: put a gun to their head.

How I became an Apple fan(atic)

I’ve been an Apple fan since the 1980s. Like most kids my age, we used Apple II computers at school (you’ll know someone was a real Apple fan–and is really old like me–if they spell the names properly as Apple ][ Plus and Apple //e).

Off the top of my head, here are the Apple computers I owned over the years. I had a Macintosh SE/30 when I started college. I got a Powerbook Duo my later years in college–I remember I was one of the first to ever use a laptop in college and got reamed out in front of the whole class by a professor because he assumed I was playing games (I told him I was taking notes, and he sheepishly apologized but I dropped his class anyway). When I started my first job I asked for–and got–a PowerMac 7200 for work. Since then I’ve used for both work and home Performas, iMacs, Macbooks, iPods, iPads, iPhones, and every Apple product you can think of.

How Apple betrayed my trust

My Apple //e was a workhorse that still boots up 38 years later. I’ve saved all my old Apple products from the 1990s for nostalgia, and to this day I know I can take out my Mac SE/30, the Apple IIGS, and my old PowerMac from storage and have it boot up just like it did three decades ago. Apple had once owned manufacturing facilities in California and Colorado, which is where those products and many more like them came from.

But by the early 2000s, most of its product assembly moved to China, thanks to decisions (supported by Apple) of its ODMs like Foxconn and Quanta. The irony of Foxconn and Quanta, of course, is that they’re Taiwanese companies, and yet they outsourced their production to China–yes, the same China that is buying tanks and missiles that are pointing to them and their families. It’s the ultimate in stupidity, but money makes people do strange things.

Starting around that time, I started to notice my Apple products breaking. I’m sure you’ve experienced the same if you’re an Apple user. Power cables would fray and disintegrate. Keyboards would experience stuck keys or repeated keys. Monitors would blank out. And it all would conveniently happen after the warranty expired. But because of my early experience with Apple, I bought more and more from them, like pigs returning to the trough.

The last straw

The last straw came with my MacBook Pro 13 inch 2018. I bought the machine for a ridiculous amount of money. But as soon as the warranty expired, I noticed the case started expanding because the battery was swelling. Also, the letters on the keyboard were repeating.

I was happy that Apple had a program in place to replace my keyboard for “free”, but when I took it in to the Apple store the “Geniuses” (a whole bunch of vacuous millennials who don’t know a PRAM from a DRAM) told me I had to pay 200 to get the battery replaced before I could get the keyboard replaced “for free”. Then, as I was preparing the laptop to bring it in for service, the screen broke because the battery had swelled so large.

And the only response from the Apple “Geniuses”? That I was foolish for not buying AppleCare. That’s right, it’s gotten to the point where Apple insults its customers by questioning why they didn’t buy the insurance knowing that their product would fail.

And that’s when I told myself–my next computer is going to be a Gigabyte and my next phone is going to be a Samsung, unless Apple comes to its senses and gets the hell out of China.

Tim Cook’s Deal with the Devil

In late 2021, it became clear why Apple never diversified its supply chain out of China. Tim Cook had made deals with China back in 2016 in response to some classic Communist Party blackmail. It seems that the China government was going to crack down on Apple with a whole bunch of regulatory actions, when Tim Cook rushed in to appease them. He signed a deal promising more than 275 billion of business to China-run hardware and software firms, as well as to invest billions of dollars in building up China’s infrastructure and to invest in China tech companies and universities. Where is that 275 billion coming from? A part of it came from every iPhone and MacBook we purchased that was made in China.

The tariffs put in place by the Trump Administration and continued by the Biden Administration (for now) are already having a positive effect in terms of getting ODMs to diversify some manufacturing to places like India, Vietnam, Malaysia and Thailand. But far too many of Apple’s suppliers are still in China. And the recent trends is tenuous as lobbyists with lots and lots of money (many of them funded right out of the coffers of the CCP) wield influence in Washington and in corporate boardrooms.

But for die-hard Apple fans there is hope. In recent years, no doubt inspired by public outcry when idiotic moves like Tim Cook’s are exposed to the sunlight, and probably helped by the fact that Tim Cook’s 5 year deal is finally coming to a close, Apple has started to direct its suppliers to move more production outside of China.

Most recently, Apple said that it would be shifting some iPad production to Vietnam after the CCP’s disastrous decision to lock down Shanghai’s citizens. This may be a temporary thing until Shanghai’s residents are allowed to go back to work, but if you’re lucky this means you might be able to find a “Made in Vietnam” iPad in the coming months if you look hard enough.

Now before you get too excited, bear in mind that these Vietnamese production lines are owned by BYD, a China conglomerate. Their decision to build a production line in Vietnam is no doubt related to the 2018 tariffs, as was the decision to produce Mac Studio computers out of Malaysia, even though final assembly was done in China.

So yes, a lot of Apple products you see that are marked “Made in Vietnam” or “Made in Malaysia” still have China’s stink on them, but by not being marked “Made in China” you know that a decent portion of the product’s production was outside of China. If your heart is set on Apple, buying one of their products not made in China will at least send a message.

If you’re lucky enough to be shopping in India, Apple does make iPhones there. But most of the iPhones made there are destined for the India market.

How do I buy an Apple product not made in China?

This list is going to be a little different than most of the lists on this site. Most of the products I highlight on this site are made in one place. But because Apple has so few products with so much demand, they’ll often make it in multiple places. So there will be situations where the same product and even the same model number are assembled in different countries.

So inclusion of a product on this list merely means that I’ve confirmed that this product has SOME of its production lines outside of China. But before you buy the product, you should make sure to check that it wasn’t made in China before you buy it. By law, they have to put the country of origin, i.e. where the product has undergone the most “substantial transformation” on the outer box, so make sure you go into an Apple Store or a retailer like Best Buy to double-check before you buy. And set expectations for yourself–despite Apple’s improvements since 2019, 90% of their products continue to be made in China. But if you’re lucky, you’ll be able to find one that’s not (and hold on to it, as it may become a collector’s item).

AirPod Pros – Some made in Vietnam

I’m listing these first because I happen to own a pair myself, and I’m pretty happy with them.

Well, I have to walk that back a little bit. I bought a pair of AirPod Pros back in early 2020 and I happened to buy a pair that had the horrible crackling noise many early purchasers experienced. But to Apple’s credit, they honored their Service Program and replaced my pair. Bizarrely enough, for my replacement pair the left AirPod was made in China, and the right AirPod was made in Vietnam. But they both seem to work–for now.

If you’re in the market for Airpods, be sure you check the outer box before you buy. Both AirPod 3s and AirPod Pros had been made in Vietnam since 2020, but due to supply chain problems in both Vietnam and China, production has shifted between the two. If you’re buying a pair you’re going to want to verify that the case AND both Airpods are made in Vietnam before buying. If you’re buying from Amazon, take advantage of their Free Returns service. Or go to an Apple or Best Buy store in person.

Apple’s shift of production to Vietnam in 2020 was almost certainly related to the 2019 tariffs imposed by the Trump administration. Let’s hope the Biden administration stays strong and keeps those tariffs in place–as of this writing they have, but some within the administration are pushing for them to be dropped.

Mac Pro – Made in USA

A lot of media outlets downplayed or even belittled the news, but I saw it as welcome, if mostly symbolic. Apple could have make a lot more profit if it plowed ahead with its plans to screw over its Austin-based employees, as well as suppliers in multiple states that were supplying parts. But it stuck to its guns.

The Mac Pro is Apple’s top-of-the-line Mac computer. At over 6,000 it’s not for everyone, but for those who need it, it’s a powerhouse performer.

For years, the Mac Pro had its final assembly done in Austin, Texas, making it the only Apple computer with “Assembled in USA” on its label. But in June 2019, Apple announced that Mac Pros would be made in China. After some negotiations with the federal government, Apple switched courses and announced in September 2019 that it would indeed continue to assemble the Mac Pro out of Austin, in exchange for some tariff exemptions.

As of right now the factory in Austin is still open, and the latest rumors are that the new Mac Pro won’t be announced until 2023, which means you can still get an “Assembled in USA” Mac Pro. You can pick one up at places like BH, Best Buy, and of course Apple. Just be sure to read the box–China does manufacture these too for customers outside of the US market, so you’ll want to make sure you don’t get one of those.

Let’s hope that whenever the new model is announced, Apple will not cave and shut down its last remaining US manufacturing facility, especially if the new Administration starts to ease up on tariffs.

Mac Mini – Some made in Malaysia

Starting in 2021, Apple started moving production of the Mac Mini to Malaysia. This wasn’t universal–some were made in Malaysia while others continued to be made in China. But there were lots of happy Комментарии и мнения владельцев on Reddit from people who received actual Macs not made in China.

At the risk of sounding like a broken record, this diversification was most likely another positive benefit of the 2018 tariffs, and why it’s so important for those to stay in place.

The Mac Mini is a small form factor desktop computer that sit somewhere between the entry-level iMac and the professional Mac Studio and Mac Pro. Unlike iMac it doesn’t come with a built-in monitor, but all you really need to do is get an HDMI cable to connect it to your high definition TV.

Buy one at Best Buy, but as always, check the outside box first to make sure you’re getting a Malaysia one and not a China one.

Mac Studio – Some made in Malaysia

The next step up is the Mac Studio, which sits between the Mac Mini and the Mac Pro and retails for about 2000. There have been reports for some time that at least some of Apple’s Mac Studio computers are being made in Malaysia, out of the same factories that have been making Mac Mini’s. Sure enough, the newest version was just released in March 2022, and there are reports of people getting units made in Malaysia.

The newest version has the blazing fast Apple M1 chip and since it just released you can be assured this won’t get outdated any time soon. You can pick one up at Best Buy or BH. Just be patient, as there are likely supply chain issues that are slowing down production. And of course, as always, check the box.

M1 iMac – Some made in Thailand and Ireland

There are reports that some M1 iMacs are made in Ireland and Thailand, and this has been confirmed “in the wild”.

This is definitely one where you’ll want to visit a Best Buy, a BH, or an Apple Store in person and confirm where it’s made before you spend money on it. Most will likely come from China, but you might get lucky.

The M1 iMac is the entry level Mac, and the only one that comes with a built-in monitor. It is impressive that Apple has managed to diversify the supply chain for all four of its desktop computer lines; their decision was probably initially due to the 2018 tariffs, but hopefully they’ve learned their lesson with the CCP’s draconian lockdowns to control COVID that it’s not Smart to put all their eggs in the China basket.

HomePod Minis – Some made in Vietnam

Apple launched their HomePod Smart speaker back in 2018 to compete with the Amazon Echo and the Google Home. They eventually discontinued it in 2021, citing the success of the cheaper HomePod Mini.

Happily, since it was released in late 2020 the HomePod Mini has been made in Vietnam. There’s a very good chance if you buy one that it’ll be made there. You’ll want to pick yours up at Best Buy or Walmart (when I search for “HomePod Mini” on Amazon, I just get listings for Echo devices–anti-trust anyone?

iPhone 14 – Some made in India

As China has shot itself in the foot with its COVID lockdowns, that has made India a much more appealing option for Apple and FoxConn. Make no mistake–the lion’s share of iPhones will continue to come out of China, but if you’re lucky, you might find a Made in India model. India-made iPhones will be provided to the India market first, of course. But if you’re lucky you might find one in your local Apple Store. Or, you can go for a Samsung Galaxy, still made in free Korea.

Have you come across any other Apple product getting its manufacturing diversified outside of China? Let us know in the Комментарии и мнения владельцев!

Комментарии и мнения владельцев

I really can’t take this company seriously. The 275 billion deal, the poisoning of workers by using harmful substances, environmental scandals, explosion with deaths, minors at work, suicides among workers, etc… There are plenty of alternatives available. Besides that, the brand is also much too expensive, price/quality ratio is completely missing. I don’t own anything from Apple and will not buy anything from Apple, at least as long as they continue their ridiculous, selfish policies. I understand that you Americans look at it differently because it is an American brand. The question is how much is actually American about this brand…?

I hear you, Paul. As you can probably tell it gets very personal for me, as I was a lifelong fan and promoter of Apple back when they were still the same Apple that Steve Wozniak and Steve Jobs founded and made “insanely great” products out of California and Texas. I’m not sure if Jobs would have dove head-first into cheap, abusive China manufacturing as much as Tim Cook did, but there’s a part of me that feels he would have resisted the CCP’s extortion and made more of a stink about Foxconn’s labor practices. In many ways, Apple is typical of American brands. In the 1990s they saw outsourcing to China as a way they could cut costs–no different than the outsourcing they’d done to Taiwan and Japan in years past. And then over the years. and especially in 2007, there were warning signs of the dangers of getting too close to China, but their shareholders were already hooked by that time and demanded more cheap manufacturing., regardless of the costs to human rights or geopolitics. The CCP was all too happy to comply, first by subsidizing its suppliers so that companies in no other country could establish a foothold. And then once China suppliers dominated the market, the CCP started pushing its weight around more. The 275 billion deal Tim Cook made was not just Tim Cook selling out every other country–the alternative would have been Apple being subjected to unprecedented regulation. It wasn’t until President Trump’s tariffs in 2018 that America FINALLY started to push back (and there’s talk that the current administration wants to get rid of those). Bottom line, there are a lot of people who are going to buy Apple no matter what, especially in the US. This post is really meant to challenge those people–IF you are going to buy an Apple product, buy one that’s not made in China to send a message. As for me, I’m still using my iPhone 12, which was made in China (unfortunately I bought it before I started this site and really started to get serious). My next phone will probably come in the next year or two. My plans at that point are to buy a Samsung Galaxy, unless I can find an iPhone 14 made in Vietnam. Let’s hope the CCP’s dumb moves like locking down cities like Shanghai will do to the marketplace what American business and government could not–make other countries more appealing for manufacturing.

I wrote an article that was published nationally, condemning China for the Coronavirus, and urging reparations in the trillions of dollars globally. When I went to an Apple store and wanted to buy a new Mac Book Pro, they brought out the box and it indicated “made in China.” I said “thanks, but no thanks.” Will they ever build them in the USA?

I am starting to draw to the same conclusion Paul. I cannot believe that the United States and other countries are doing business with a Godless communist nation such as China. There are many good Chinese people on this planet, its their Government that is not good for anyone.

We estimate China only makes 8.46 from an iPhone – and that’s why Trump’s trade war is futile

The Trump administration’s tariffs on China have so far targeted mostly industrial goods like aircraft engines and gas compressors. But the administration has also threatened to slap tariffs on US200 billion in other goods if the dispute continues.

No list of all the goods that might be subject to tariffs has been released, but it would have to include consumer electronics, such as smartphones, which is the largest single product category in China’s exports to the U.S.

One well-known product that might be affected is Apple’s iPhone, which is assembled in China. When an iPhone arrives in the U.S., it is recorded as an import at its factory cost of about 240, which is added to the massive U.S.-China bilateral trade deficit.

iPhone imports look like a big loss to the U.S., at least to the president, who argues that “China has been taking out 500 billion a year out of our country and rebuilding China.” One estimate suggests that imports of the iPhone 7 and 7 Plus contributed 15.7 billion to last year’s trade deficit with China.

Who really makes the iPhone?

Let’s examine an iPhone 7 a little more closely to see how much value China is actually getting.

Start with the most valuable components that make up an iPhone: the touch screen display, memory chips, microprocessors and so on. They come from a mix of U.S., Japanese, Korean and Taiwanese companies, such as Intel, Sony, Samsung and Foxconn. Almost none of them are manufactured in China. Apple buys the components and has them shipped to China; then they leave China inside an iPhone.

So what about all of those famous factories in China with millions of workers making iPhones? The companies that own those factories, including Foxconn, are all based in Taiwan. Of the factory-cost estimate of 237.45 from IHS Markit at the time the iPhone 7 was released in late 2016, we calculate that all that’s earned in China is about 8.46, or 3.6 percent of the total. That includes a battery supplied by a Chinese company and the labor used for assembly.

The other 228.99 goes elsewhere. The U.S. and Japan each take a roughly 68 cut, Taiwan gets about 48, and a little under 17 goes to South Korea. And we estimate that about 283 of gross profit from the retail price – about 649 for a 32GB model when the phone debuted – goes straight to Apple’s coffers.

In short, China gets a lot of (low-paid) jobs, while the profits flow to other countries.

The trade balance in perspective

A better way of thinking about the U.S.-China trade deficit associated with one iPhone would be to only count the value added in China, 8.50, rather than the 240 that shows up as a Chinese import to the U.S.

Scholars have found similar results for the broader U.S.-China trade balance, although the disparity is less extreme than in the iPhone example. Of the 2017 trade deficit of 375 billion, probably one-third actually involves inputs that came from elsewhere – including the U.S.

The use of China as a giant assembly floor has been good for the U.S. economy, if not for U.S. factory workers. By taking advantage of a vast, highly efficient global supply chain, Apple can bring new products to market at comparable to its competitors, most notably the Korean giant Samsung.

Consumers benefit from innovative products, and thousands of companies and individuals have built businesses around creating apps to sell in the App Store. Apple uses its profits to pay its armies of hardware and software engineers, marketers, executives, lawyers and Apple Store employees. And most of these jobs are in the U.S.

If the next round of tariffs makes the iPhone more expensive, demand will fall. Meanwhile Samsung, which makes over half its phones in Korea and Vietnam, with a lower share of U.S. parts, will not be affected as much by a tariff on goods from China and will be able to gain market share from Apple, shifting profits and high wage jobs from the U.S. to South Korea.

Put another way, research has shown globalization hurt some Americans while it made life better for many others. Putting globalization in reverse with tariffs will also create winners and losers – and there could be far more of the latter.

Why not make the iPhone in America?

When we discuss these topics with policymakers and the media, we’re often asked, “Why can’t Apple just make iPhones in the U.S.?”

The main problem is that the manufacturing side of the global electronics industry was moved to Asia in the 1980s and 1990s. Companies like Apple have to deal with this reality.

As the numbers we’ve cited make clear, there’s not much value to be gained for the U.S. economy or its workers from simply assembling iPhones here from parts made in Asia.

While it’s possible to do so, it would take at least a few years to set it up, cost more per unit than production in Asia, and require a lot of carrots and sticks from policymakers to get the many companies involved to do so – for example, like the potential 3 billion in subsidies Wisconsin gave to Foxconn to build an LCD factory there.

A flawed response to the challenge from China

There is, of course, plenty for the U.S. to complain about when it comes to China’s high-tech industry and policies, whether it’s the lack of intellectual property protection or non-tariff barriers that keep major tech companies such as Google and out of the huge Chinese market. There is room for much tougher and more sophisticated bargaining to address these issues.

But where trade is concerned, policies should reflect that manufacturing is now a global network. The World Trade Organization has already developed an alternate set of trade numbers that shows each country’s trade in value added terms, but the administration seems to have missed the memo.

Trump’s trade war is based on a simplistic understanding of the trade balance. Expanding tariffs to more and more goods will weigh on U.S. consumers, workers and businesses. And there’s no guarantee that the final outcome will be good when the dispute ends.

This is a war that should never have been started.

Did you find this article insightful?

If so, you’ll be interested in our free daily newsletter. It’s filled with the insights of academic experts, written so that everyone can understand what’s going on in the world. With the latest scientific discoveries, thoughtful analysis on political issues and research-based life tips, each email is filled with articles that will inform you and often intrigue you.

Beth Daley

Editor and General Manager

Where Are iPhones Made and Assembled?

To manufacture is to produce the components that make an iPhone but to assemble an iPhone is to take all the components needed and combine them to offer a fixed working iPhone. Specialists are the ones that manufacture the components, but they are not the same people that build them. Apple manufactures its components in a different place and assembles them elsewhere. So that leads us to the question, where are iPhones made and assembled?

Memory chips, cameras, casings, glass screen interfaces, and everything are manufactured by over 200 companies in Asia and the United States. Two Taiwanese firms are in charge of assembling iPhones: Foxconn and Pegatron. They have branches around Asia where iPhones are assembled.

However, the Foxconn Plant in Zhengzhou, China, is the biggest assembling plant. It spreads across 2.2 square miles and has approximately 350,000 people employed. In a day, around 500,000 iPhones are produced by Apple manufacturers.

This article will show you more details about where Apple iPhones are made and manufactured.

Which Companies Assemble Apple’s iPhone?

Just like we have established already, two companies located in Taiwan are in charge of iPhone assembling: Foxconn and Pegatron. They assemble iPhones, iPads, and iPods for Apple. Foxconn is a Taiwanese company specializing in assembling electronics. In building devices, Foxconn has been Apple’s longest-running partner, and the firm’s official name of Foxconn is Hon Hai Precision Industry Co. Ltd. Although it has factories across many countries, the majority of the iPhones assembled are made in Shenzhen, China. Foxconn has been Apple’s manufacturer for a long time because of its incredible efficiency in manufacturing.

Foxconn naturally has big assembly lines that can take up to 200,000 workers at a time and produce over 50,000 iPhone 5S back plates in a day. Although iPhone is mostly manufactured in Southeast Asia and the East, where they have a large and cheap labor force, China, Thailand, Taiwan, Vietnam, Malaysia, Philippines, and Indonesia are the countries that have those characteristics and also manufacture iPhones. China mostly assembles the iPhone (over 80% of iPhone 5s are made in China), but several countries in Asia also assemble the phone.

The iPhone in your has components likely to be from several manufacturers around the world. Still, it’s most likely the phone is assembled in China because China produces a high percentage of most iPhones in circulation.

Conclusion

Many companies supply Apple with the components needed to assemble their iPhones, but Foxconn and Pegatron are the assemblers of the iPhone. The largest assembler of iPhones is Foxconn, and they have been working with Apple for a long time. So with these facts stated above, you now know where iPhone is made and assembled.