Wen: Wang Xinxi
Earlier, according to Nikkei media, Apple set up a production line evaluation team of about 30 people in December last year. It is studying supply chain transfer. It has asked major manufacturing partners such as Foxconn, Heshuo and Weichuang to assess feasibility and seek the transfer of the product lines of the iPhone, MacBook, iPad and AirPods in countries including India, Mexico and Nissi, India. Asia, Vietnam, etc.
Therefore, we can see that Apple plans to transfer its production line, on the one hand, because of trade war tariffs, on the other hand, because of the shrinking market share of the iPhone in China, the competition in the Chinese market and the unoptimistic growth in the future.
On the other hand, China's smartphone market has been saturated, the incremental space has shrunk, and the demand for switching has slowed down. However, India and Southeast Asia still have huge demographic dividends.
Behind the shrinking share of the iPhone in China, the market share of Huami OV has increased. If we continue to produce all the iPhones in the mainland of China, the demand in the Chinese market may be difficult to digest the capacity of Apple's huge production line.
From the perspective of corporate profits, where is the demographic dividend, where is the demand, and where is the supporting facilities related to the mobile phone manufacturing industry.
Apple began manufacturing the iPhone in India last year, mainly including models such as the iPhone SE and the 6S Plus. Foxconn and Weichuang factories have opened factories in India to meet Apple's demand for the production of the iPhone in India.
Last year, Apple was considering shifting production of more high-quality products to the country to avoid the impact of import tariffs on smartphones.
According to media reports, Foxconn has said that it has the ability to transfer all the iPhone production supplied to the United States out of China. But after Liu Yangwei was elected as the new chairman, he denied the news and said that there were no plans to increase production capacity outside China. He denied the rumor that Foxconn had withdrawn from Chinese production.
If Apple shifts its capacity, Southeast Asia, India and Mexico may be the ideal locations for Apple. On the one hand, labor costs are cheaper in these areas, while the region's economy is growing. On the other hand, these areas are new markets for smartphones, and the market demand is growing rapidly.
Therefore, the distribution of production bases in regions with growing demand can better compete for emerging markets.
So we see that Vietnamese economist Vu Dinh Anh said that Vietnam could become a potential country for Apple's production line transfer. Malaysia, meanwhile, is saying that Apple is willing to consider relocating its production line to the country.
The data show that Apple's main suppliers are from the United States, Europe, Japan, South Korea and China, which are responsible for the supply and manufacture of the major components of the iPhone.
According to the suppliers disclosed by Apple in 2017, of the 200 major suppliers, the United States, Japan, mainland China and Taiwan China comprise 166, with Chinese suppliers in the top four, and five more in 2018. Among Apple's 200 major suppliers, the proportion of Chinese suppliers has increased by about three times since 2012.
Previous data showed that 90% of Apple suppliers and factories are in China.
According to an earlier statistics, the supply chain of raw materials and components for the iPhone comes from 31 countries, with China having the largest number of suppliers, 349, followed by Japan, with 139, while the United States ranks third with 60 suppliers. Next came South Korea, Malaysia, the Philippines, Thailand, Singapore and Germany.
The camera module, PCB circuit board, antenna, FPC flexible printed circuit board, speaker, touch motor, glass cover, glass back cover, metal structure, precision connector and so on are all supplied by Chinese suppliers.
For example, among Chinese suppliers, besides Foxconn and Apple in China, many of them focus on the supply of mobile phone, waterproof components, camera modules, WiFi modules, acoustic modules, screens, motors, shells, connectors and other components.
Typically, Kohl Acoustics provides an acoustic module for the iPhone, Desai Battery and Hwanda Cell Phone Battery, Opel Light Camera Module, Lance Technologies and Burn Optics glass cover for Apple. Zhejiang Crystal Optoelectronics provides IRCF, Jinlong Electrical Machinery provides linear motors for the iPhone, Anjie Technologies provides screen touch layer functional components for the iPhone X, Huanxu Electronics provides WiFi modules, Lixun Precision Supply Data Line, Raytheon Technologies supplies audio equipment, Shunyu Optical Production Lens, Lixun Precision, Yingtong Communication, Dongshan Precision and other domestic suppliers provide wireless charging coils. Modules and so on.
Second is the generation factory, which contributes most of the assembly business to the iPhone in China, accounting for 75% of Foxconn's production capacity in China. And skilled industrial workers are the most critical and core resources of the production business by the agent factory.
In addition to Chinese companies, including Apple suppliers scattered in the United States, Japan, Taiwan, China and Europe, many other manufacturers are also located in China, such as Taiwan's 51 suppliers with 152 factories, 114 of which are in mainland China. There are 217 factories from 47 suppliers in the United States, 69 of which are located in China.
As a result, if Apple is to transfer capacity, if these companies are counted, the number will be enormous.The relocation of production capacity is actually affecting the entire Apple industry chain and layout, for its suppliers, it is also quite fragile.
Firstly, if the factories are moved out, their local business needs will be greatly affected.Although suppliers can transport parts to other areas through a variety of channels, the additional transportation costs and tariffs that need to be borne in the process also add a great operational burden.
Second, theyThe need to set up new branches in new areas where the market demand is not clear and skilled workers are scarce leads to the decline of industrial agglomeration effect and ultimately the decline of production efficiency.
I pointed out earlier that the lack of skilled technicians and industrial workers in the United States is an important reason why Apple factories are unable to migrate.
Years ago, the New York Times cited a case in which it would take up to nine months to find and employ 8,000 qualified industrial technicians overseeing the production of the iPhone in the United States, but only 15 days in China.
The same is true of other countries. The huge skilled industrial workers have brought better electronic material processing technology, deposition and coating technology, complex testing and assembly ability to Apple iPhone. These abilities are dominated by skilled industrial workers in China, and also contribute to the production and processing of iPhone series products.
Thirdly, after relocation,In terms of production capacity and the training of skilled technicians, great time cost and production cost will be paid.In a short period of time, it will inevitably affect the yield of product production and shipment sales, in fact, it has a potential impact on the sales of the iPhone.
Because China's raw materials and accessories business has played an important role in the efficient procurement and supply of the iPhone. In China, various accessories, including antennas, frames, coatings, films and modules, are provided around the production of the iPhone.
At present, almost all of these components are produced by enterprises in Guangdong, Fujian and Shanghai of China. No matter in India, Vietnam, Thailand and other countries, they can not produce high-efficiency supplies in the first time, and even the high-quality products can not be guaranteed.
In addition, in China, Huaqiang North, Zhongguancun, South China City and other entities, as well as the network electronic parts market, can quickly purchase all materials for the production of a product to the factory.
For example, earlier data showed that Foxconn's production base in Zhengzhou had 94 production lines. It takes about 400 processes to assemble an iPhone, including polishing, welding, drilling and screwing.
It can produce 500,000 iPhones a day, roughly 350 in a minute. This is difficult to do in other countries and regions, which is related to the production of the iPhone, shipment efficiency and product quality control and quality.
The relocation of the factory means that it needs to go through a long period of pain.Apple has established a huge product supporting system, logistics and parts supplier ecosystem and a huge team of skilled workers in China. China's infrastructure is more stable, and the supply chain industry technology structure is more perfect. Even if Apple intends to diversify production capacity, it is difficult for Apple to cultivate a supply chain cluster comparable to the Chinese market.
OEM manufacturers need to rely on a large number of supplier industries to support production, demand, environment, industrial ecology are closely related.
At present, Apple is in China around the raw materials, technicians, management, market and other industrial chains of the manufacturing of the iPhone, and has formed industrial chain clusters. The benefits of industrial chain clusters are to promote the upgrading of the surrounding industrial chain and complement the production capacity to form an irreplaceable supply chain network.
As former Apple executives once told the New York Times:
It brings about a great improvement in efficiency and a great reduction in cost. If we move to other areas rashly, the result will be: on the one hand, the lack of skilled industrial workers leads to the problem of product quality control; on the other hand, the lack of complementary effect of industry leads to the rapid decline of quality supply capacity and production and innovation efficiency of spare parts.
From the perspective of liquidity among supply chain enterprises, designers, engineers and workshop production staff can gather in the same eco-industrial environment rather than scattered in different countries. Close business overlap can enhance mutual integration and understanding, and bring greater creativity.
In the book "Manufacturing Prosperity", the author mentions the viewpoint of an industrial site, which is roughly as follows:Every one of the industrial lands
It's like an ecosystem, every one.
For Apple, it may have realized that relying on China's product matching and support capabilities is always a big hidden danger for Apple. Although there is a painful process of adaptation, Apple may have to do so.
But the lack of a large industrial cluster to support the rapid production of key components in a single, large market like China may leave Apple with a lack of quick response to the market in the future.
Of course, Apple's relocation of production capacity is not good news for China, because from the perspective of industrial commons,The ups and downs of any industry are not isolated, but involve the whole body.
Apple's supply chain factories represent the high-end manufacturing industry. Apple's relocation of the supply chain to other countries will strengthen the production and assembly and R&D capabilities of mobile phones manufactured in other developing countries, which in turn may lead to the weakening of the competitiveness of China's mobile phone manufacturing industry.
The core driving factors of mobile phone manufacturing industry chain transfer are business and consumer demand. In terms of business and demand, both Foxconn and other manufacturers, as well as Apple and Huami OV, have the need to adjust the market layout.
One trend is that large domestic manufacturers are also running out. From the point of view of domestic mobile phone manufacturers, almost all Chinese mobile phone manufacturers have set up factories in India, such as vivo, OPPO, millet, Jinli, etc. They have already invested in Indian factories, and more factories and supply chain supporting construction are under planning. Of course, this is also based on the need to open up foreign markets, the need to launch global competition.
With the rise of labor costs in China and the transfer or relocation of manufacturing industries of multinational enterprises to other countries with more cost-effective advantages, China's low value-added industries have not yet been transformed successfully. How to form core advantages to migrate to the upstream before the global division of labor is re-established will also be a difficult problem for domestic manufacturing industry to consider.