We bet Trump didn’t consider all the repercussions when he stepped into a trade war with the big tech superpower of the East (read: China). Yes, smartphone maker Huawei needs US-developed software to win the hearts of users in the West, but many US tech companies make use of Chinese hardware components. Including perhaps the most popular of all: Apple. Luckily the California-based tech company has a backup plan if things go completely sour.
According to a report by Bloomberg, Apple’s “…primary manufacturing partner has enough capacity to make all iPhones bound for the US outside of China if necessary…”. Which essentially translates to: Apple can make its devices without China’s help.
But it may not have to take this option. China’s government hasn’t targeted Apple in any way after the Trump administration sanctioned all US trade with Huawei. In an interview with Bloomberg at the end of May, Huawei founder Ren Zhengfei said he would “…be the first to protest” if China were to impose a similar ban on Apple’s US-made iPhone devices in China. And about a week ago, Apple CEO Tim Cook reaffirmed this statement, saying that he does not anticipate the Chinese government will do to Apple what Trump did to Huawei.
China’s spot can be filled
Even considering the Chinese city Shenzhen manufactures about 90% of the world’s hardware, China doesn’t manufacture any of Apple’s core components. Most of it is handled by Foxconn, which is based in Taiwan.
Foxconn has stated that it will fully support Apple should China impose drastic measures against the US. It’ll aid in the adjustment of Apple’s production, which is currently done in China. “Twenty-five per cent of our production capacity is outside of China and we can help Apple respond to its needs in the US market. We have enough capacity to meet Apple’s demand.” says Foxconn board nominee and semiconductor division chief Young Liu.
Although it hasn’t gotten to that point yet, Foxconn says that it will be able to take on all production currently happening in China with immediate effect. Apple just has to say when. Long story short? The iPhone probably won’t be too affected by ongoing USA-China trade tensions.
Source: Bloomberg
