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In the face of disruptions similar to the COVID lockdown, Apple is moving some of the iPad production from China to Vietnam, according to Nikkei Asia. The company is also taking other steps with its suppliers to mitigate the blow of disruption in China.
This is Apple’s first attempt to move some of the production out of China. Some iPhones were made in India, a small number of Macs were assembled in the United States, and Vietnam is already paramount in the production of AirPods.
Apple is looking to move more production to Vietnam in 2020 and 2021, but had to postpone some of its plans as COVID-19 waves hit the country.
Currently, the company relies so heavily on fast regions in China that outages can affect its ability to ship new iPhones each year. It already seems that the variety of products this fall will be affected.
To prepare, Apple allegedly told its suppliers to start stockpiling fast parts “such as published circuit forums and mechanical and electronic parts. “to meet the demand for your products.
Inventories could worry some suppliers, Nikkei notes, because if the downward decline in customer demand for electronics continues, suppliers could also run out with the parts they needed. On the other hand, Apple reportedly helped pay the bill for moving supplies.
The iPad is the only major apple product category to see a year-over-year decline in earnings in the most recent quarterly earnings report. CEO Tim Cook advised in a call with investors that the root issues were a factor.
Given that the iPad and iPhone use some of the same parts and that the iPhone is the company’s main product, some analysts have speculated that Apple might have opted to prioritize the iPhone parts at the expense of the iPad.
Apple will most likely introduce and ship new iPad and iPhone models this fall.
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