There have been several reports that Apple is prepping the iPhone 9, their smaller, lower-cost follow up to the iPhone SE, for a March release. However, there just so happens to be a novel virus running rampant through China that is likely to gum up the works.
First off, we have a report from Reuters today that Foxconn was given the green light to re-open one of their Chinese plants, while their request to open a second was denied. However, so far only 10% of the workforce has shown up for work in their re-opened Zhengzhou plant. It’s a start, but those numbers aren’t going to get new devices to market on time. And there is always the possibility that the coronavirus spreading further could shut the plants down again.
Second, we have a separate report that Apple is reacting to the extended shutdowns of Foxconn plants in China by moving production to India. The company has been working to beef up production in that country for various reasons over the last few years. First, it has been a good way for them to repair the rocky relationship they had with the Indian government in the past. This has already started paying off with a better relationship and better sales in the country.
Apple was also reportedly looked into beefing up production in India and other nations in SE Asia to avoid potential tax and tariff issues in the United States last year. Thanks to deals struck with the Trump administration, Apple was able to avoid the bulk of the issues without re-routing production. However, it pays to be prepared and nimble when it comes to manufacturing. That may pay dividends in the future, like right now.
Courtesy of Ming-Chi Kuo (via Cult of Mac), now we have a third, much more pressing reason for Apple to move production to India. If the coronavirus continues to be a threat in China for an extended period of time, it will definitely affect the supply chain that all electronics manufacturers depend on. There isn’t enough production capacity in India to offset a worst-case scenario in China, but there is enough to keep Apple on track in the short term.
That said, it is pointed out in the Cult of Mac article that iPhone SE 2 (iPhone 9) production is more likely to come from a Pegatron factory in Kunshan. This plant wasn’t hit as hard by coronavirus initially, but Kuo projects their workforce to drop from near 90% recently to between 40 to 60%. That is a significant dent, so it remains to be seen if Apple can keep the iPhone 9 on schedule for release, or not.
As I said a couple of weeks ago, if the coronavirus outbreak in China is a bad as some believe it is, then keeping people in harm’s way to produce consumer electronics would be completely irresponsible. As much as we Apple fans want to get our hands on the latest gear. this is a good time for some perspective. I hope the iPhone 9 makes it out on time, or at least close to it, but this pales in comparison to keeping people in China as safe as possible from coronavirus. I just hope the Chinese government, Foxconn and Apple can keep that all in perspective.