Apple rightfully doesn’t want to be caught in the middle of the US-China trade war

This could further escalate tensions between the two countries and China might retaliate against US businesses to get back at the Trump administration. Most of Apple’s contract factories are in China and it couldn’t risk a disruption because of the rift between the two countries. 

One location of interest for Apple is India. The report says Apple executives are in touch with Indian officials regarding moving production capacity worth $40 billion over the next five years. Production will likely be done by current partners Wistron and Foxconn. At the same time, the company supposedly wants to reduce its reliance on the Taiwanese manufacturer Foxconn. This is typical of Apple, as diversifying the supply chain helps it to minimize disruptions and negotiate better prices.

According to another report, Apple might move as much as a fifth of its manufacturing capacity to India. 

On the demand side, China made up 14.8 percent of Apple’s revenue in Q1 2020. Needless to say, China is an important market, and the smartphone market there is already showing post-pandemic signs of recovery.