With constant lockdowns in China due to the rise of COVID-19 cases, Apple is now in an “action plan” to diversify its supply chain management risks out of the country, according to a new report by analyst Ming-Chi Kuo.
Over these past few weeks, 9to5Mac has been reporting that Foxconn and other manufacturers are struggling with lockdowns in China. With that, the factors need to either stop production for a certain period or massively test workers to ensure there are no COVID infections among the workers.
Although Apple has been the company that best handled supply chain constraints during the pandemic, it seems it’s trying to be cautious for the near future. Here’s what analyst Ming-Chi Kuo wrote in a social media post:
Apple’s new product introduction (NPI) sites are almost in China. It was the first time for Apple to evaluate building NPI sites in non-China seriously when the COVID-19 outbreak first occurred about two years ago, but internally it only proceeded to the proposal stage. However, after the recent lockdown in China, to diversify supply chain management risks, building NPI sites in non-China is no longer a proposal but an action plan.
Apart from China, Apple is already diversifying its supply chain to other countries such as India and Taiwan. Recently, 9to5Mac covered that some products are harder to find due to these recent lockdowns.
The new MacBook Pro, for example, can take a few weeks to be found in some configurations. On the other hand, these lockdowns showed that the iPhone SE 3 and AirPods 3 are disappointing Apple. The low-entry iPhone that could turn one billion Android users into switchers is seeing its demand being cut in these past weeks.
9to5Mac will keep following Apple plans to diversify its supply chain management risks. Most likely, we could hear more about it during the company’s Q2 earnings call on April 28.
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