Apple Inc. is actively exploring options to diversify its supply chain, reducing its dependence on Chinese manufacturing, as confirmed by CEO Tim Cook during his recent visits to Vietnam and Indonesia. Cook’s discussions with Indonesian President Joko Widodo focused on potential investment opportunities, signaling the tech giant’s interest in expanding manufacturing operations within Indonesia.
Currently, Apple has established key manufacturing hubs in Vietnam for products such as iPads, AirPods, and Apple Watches, though it has yet to develop manufacturing facilities in Indonesia. Cook expressed optimism about investment prospects in Indonesia, highlighting the country’s potential for growth and Apple’s commitment to expanding its presence there.
This strategic shift comes amid growing concerns from the U.S. government and various businesses about over-reliance on Chinese supply chains. With the upcoming U.S. presidential election and potential policy changes, such as those proposed by Republican candidate Donald Trump regarding higher tariffs on Chinese imports, diversification is becoming a critical focus for many firms.
The Biden administration has also emphasized strengthening American supply chains as a key aspect of national security and economic stability. In November 2023, President Joe Biden announced 30 new actions aimed at reinforcing U.S. supply chains.
Apple’s initiative to reduce reliance on China also stems from challenges experienced during the COVID-19 pandemic. In 2022, virus outbreaks in China’s Henan province caused significant disruptions at Foxconn’s iPhone production plant in Zhengzhou, impacting the production of iPhone 14 Pro and Pro Max models.
By broadening its manufacturing base beyond China, Apple aims to mitigate risks associated with localized disruptions and enhance the resilience of its global supply chain.
Despite these challenges, Apple has achieved a notable market presence in China, surpassing competitors like Honour, OPPO, vivo, and Xiaomi to become the market leader in 2023. However, data from the International Data Corporation (IDC) indicates a decline in Apple’s global smartphone market share from 20.7% in the first quarter of 2023 to 17.3% in the same period in 2024, with a 9.6% drop in smartphone shipments year over year.
Apple’s efforts to diversify its supply chain are part of a broader strategy to ensure stability and growth amid evolving global market conditions and regulatory environments.
