Apple will handle years to diversify out from China, Counterpoint Research stated

Counterpoint Research: Apple will diversify out of China in years

November 11, 2022: -Apple will endure many years to diversify from its Chinese areas, even as the country is pressing on with its zero Covid policy, which hurts iPhone production, Counterpoint Research’s Jeff Fieldhack stated.

“It will take a lot of time for Apple to diversify,” the research director said on Tuesday, explaining that Apple’s recent iPhones will likely continue to be built in China for the coming few years.

On Sunday, Apple temporarily decreased iPhone 14 production as its primary iPhone 14 Pro and iPhone 14 Pro Max assembly plant in Zhengzhou, China, which operates at “significantly decreased capacity” because of the Covid-19 restrictions.

Apple is diversifying its device assembly process away from China, opening factories in countries south of China, like India and Vietnam.

“Having said that, there are areas that could be assembled in other countries such as India, but it is a very small amount,” he said.

Fieldhack recommends that the sheer number of workers Apple hires in China can be a bargaining chip with the Chinese government since the iPhone maker employs about 200,000 staff at its Zhengzhou factory.

“Apple can say, ‘Hey, we have employees in China than in the U.S.’ That is very strong and helps them avoid China’s retaliation towards the U.S. through tariffs or other decisions,” Fieldhack added.

Since the iPhone 14 models are famous and well-liked, he said, “we are expecting the majority of consumers to wait to witness these devices are available,” he added.

A JPMorgan analyst noted that it takes 31 days to get an iPhone 14 Pro after making an order through Apple’s website, compared to the average 2-day lead time for cheaper iPhone models.

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