A large-scale coronavirus outbreak in China is endangering Apple's business, and supply chain specialists warn of an increased risk of months-long challenges to iPhone production.
Given that 90% of iPhones are made in China, this threat might have a big effect on how many iPhones are produced, according to Gizchina.
The New Wave Of COVID-19 Threatens The Future Of Apple And Its Product Distribution
Following a Covid-19 epidemic that began in October, the US tech giant has had to deal with more than a month of disruption at its primary assembler Foxconn's mega factory in Zhengzhou, China, dubbed as "iPhone City."
This is a terrible situation for Apple, which often associates the holiday season with sales records and the finest fiscal quarter.
The Cupertino business is working closely with Foxconn to move the production of its iPhones to other regions of China that are less affected by the virus.
A supply chain expert warns the financial daily that the first few months of the year may be marked by a high absenteeism rate.
It is important to note that not only are manufacturers affected by this, but also warehouses, distribution, logistics, and transportation.
A longer-term concern now exists as the Chinese government reverses its zero-Covid policy: the potential for workforce shortages at component facilities or assembly factories throughout the nation.
On November 6, Apple issued a "significant" disruption alert ahead of the holiday shopping season, Financial Times writes.
Read More: Analyst Predicts That Apple Might Postpone or Cancel Mass Production of iPhone SE 4
Apple Might Move Some Of Its Production To India, Other Countries Starting Next Year's Spring
India has emerged as a country where Apple is likely to expand its operations, along with Vietnam, Thailand, and other countries.
Because of the COVID-19 resurgence in China, India is anticipated to contribute 5% of iPhone manufacture in 2023, reducing Apple's reliance on iPhone City at a relatively sluggish rate.
Building supply chain component manufacturers in India is also necessary in addition to production facilities, according to Apple Insider.
Reports also mentioned that India would be the best option among Asian nations because it is a US ally, and doing business there would cost around 10% more than Apple would in other places.
Additionally, in an effort to diversify its production base away from China, Apple plans to relocate some MacBook manufacturing to Vietnam for the first time in 2019.
According to a separate report by Financial Times, Apple has contracted with Taiwan's Foxconn to begin producing MacBooks there as early as May.
For all of its major product lines, Apple has been seeking to expand production facilities outside of China, but the MacBook has taken longer since producing laptop computers requires a complicated supply chain.
It is important to note that the majority of US-bound data center servers produced for companies like Google, Meta, Amazon, and Microsoft, among others, are now produced in Taiwan, Mexico, or Thailand.
Related Article: Apple Could Shift Some iPad Production to India To Diversify Supply Chain
