After years of being Apple’s sole partner responsible for assembling the iPhone Pro range of phones, Foxconn appears to have fallen victim to its over-reliance on Chinese labour.
Although trade bans imposed on companies like Huawei have angered the regime in Beijing, Apple received preferential treatment until the last minute, with authorities not hesitating to use the “calming down” of Foxconn employees including the “masked” teams normally reserved for suppressing social unrest and anti-regime protests. And when that didn’t work either, Foxconn management moved to “buy off” the revolting employees, giving generous bonuses for returning to work or, as the case may be, quietly leaving the industrial complex.
But the damage had already been done, with Apple blaming Foxconn’s partner for significantly missing sales targets by not delivering the stock of iPhone 14 phones ordered. In reality, the loss to China is even greater, with the demonstrated unpredictability motivating the US partner to accelerate efforts to relocate iPhone production to other locations in the Asia region. As a result, the packaging of future iPhone 15s may well be marked Made in Vietnam, with partner Luxhares one of the possible candidates to take over production. At the moment, Luxhares only produces accessories for Apple devices in Vietnam, and there are officially no plans to develop iPhone production lines.
Returning to the iPhone 14, Foxconn’s factory in the Zhengzhou Industrial Region was supposed to ship 80-85 million units by the end of 2022, but has lowered its estimate to 78.1 million units. Independent analysis further lowers this figure to 70-75 million units. Factor in the uncertain geopolitical climate and it becomes increasingly clear to Apple that it can no longer rely solely on factories in China, with strengthening relationships with OEM partners in other regions becoming particularly important for the US giant.