Apple wants to increase production outside China, the report said

Apple has reportedly told some of its manufacturing contractors that it wants to increase production outside China, citing the blocking of COVID as one of the reasons for the change. India and Vietnam are at the top of the list of sites to potentially increase production, writes The Wall Street Journal said in a Saturday report based on information from anonymous sources.

More than 90 percent of Apple’s products are made in China by contractors, the paper said, but tensions between the Chinese Communist government and the United States made the company’s dependence on China risky, and blocking COVID in China halted the supply chain. In April, Reuters reported that the blockade in parts of China could mean shortage of millions of iPhones.

In 2019, the magazine reported that Apple is considering relocating a significant portion of some of its gadgets to other countries amid trade tensions between China and the United States. Saturday’s report said the pandemic was interfering in those plans, but that Apple had renewed its focus on the issue.

Still, China remains an attractive place to make devices, the paper said, due to the country’s stable manufacturing ecosystem, skilled workers and low costs, as well as the huge domestic market for gadgets. About a fifth of Apple’s global sales are often attributed to China.

Apple considers India the next best site because of its low cost and large population, writes Journal. IPhones for the domestic market are already being produced there, and sales of Apple products in India are growing rapidly.

But China-based contractors may have trouble settling in India due to strained relations between the two governments, the newspaper said, making Vietnam and other Southeast Asian countries attractive.

Apple did not respond to a request for comment.