What you need to know
- Apple is planning to develop new product introduction sites outside of China.
- Ming-Chi Kuo says Apple first considered this during the first COVID-19 outbreak in 2020.
- He now says that after recent lockdowns in China Apple has created an action plan for the move.
New insight from supply chain analyst Ming-Chi Kuo claims Apple now has an "action plan" to build new product introduction locations outside of China to diversify its supply chain.
In a tweet Thursday Kuo said that currently almost all of Apple's new product introduction (NPI) sites are in China. Apparently, Apple first considered building sites outside of China in 2020 at the onset of the COVID-19 pandemic, which first highlighted the need for Apple to diversify its supply chain.
Now, Kuo says that Apple has moved beyond consideration to an action plan for the move:
However, after the recent lockdowns in China, to diversify supply chain management risks, building NPI sites in non-China is no longer a proposal but an action plan.
An accompanying tweet of the same information in Chinese translates the locations as "new product development bases". This suggests that Apple is working to switch up the locations it uses for the creation and prototyping of new products before they go into production. Indeed, one of the impacts of the COVID-19 pandemic on Apple's supply chain in 2020 was that Apple could not send engineers and executives to China to make key product decisions, one factor that led to the delay of the iPhone 12 that year.
It could mean that future products beyond devices like the iPhone 14 might be developed and tested in other locations beyond China in order to reduce Apple's supply chain risk. Kuo did not provide any further information about the nature of the action plan.
Reports in recent weeks note Apple is once again feeling the strain of supply chain disruption, particularly in China where COVID lockdowns have forced some factories to suspend operations, impacting the supply of the MacBook Pro (2021) and the iPhone SE.