Apple has all of its eggs in one basket: China.
The world’s most influential consumer electronics company shed $44 billion of market value Friday after a pair of pronouncements from Beijing and Washington cast a spotlight on its massive Chinese production base, from which almost all of the world’s iPhones are made.
U.S. President Donald Trump this weekend “ordered” American companies to immediately start looking for alternatives to manufacturing in China, which is something Apple is thoroughly unprepared for, according to analyst Daniel Ives of Wedbush Securities Inc.
Apple’s main assembly partner, Foxconn Technology Group, has claimed that it has the capacity to build all of the Cupertino company’s U.S.-bound iPhones outside of China, however all indications are that to deploy it would require a great deal of time and money.
Cook’s ability to lobby Washington for tariff relief will be tested over the coming weeks. He has so far been able to obtain a temporary reprieve for iPhones, iPads and Apple laptops, which won’t be subject to U.S. tariffs until Dec. 15. But going forward, unless an unlikely rapid resolution to the trade war is reached, Apple looks like it will have to draw up comprehensive plans for building iPhones outside of China, however costly that may be.
MacDailyNews Take: Regardless of the U.S.-China trade fracas, as we wrote back in April, “It’s smart for both Apple and Foxconn to diversify assembly outside of China. There’s no sense having all of your eggs in one basket.”