Apple‘s products are primarily assembled in China, which has caused issues in recent years, including supply-chain issues in the company’s most recent quarter. Now is the time for the tech behemoth to expand rapidly elsewhere. Also, a look at the company’s results from the previous quarter and how it is delaying hiring at some locations.
Apple and China
Apple Inc. likes to brag about its worldwide supply chain and how it isn’t unduly reliant on China. The reality is that Apple is heavily reliant on China for production, and this has produced problems for the firm, investors, and consumers throughout the pandemic.
Last week, on their second-quarter conference call, the company warned that supply shortages, sparked in large part by Covid-19 lockdowns in China, would cut sales by as much as $8 billion. That’s the equivalent of losing a quarter’s worth of iPad sales.
Many of their components are sourced from outside of China. Parts for the iPhone, iPad, Mac, and other products are manufactured all over the world, from the United States to India, Vietnam, and Japan.
The assembly process, also known as FATP within Apple and the manufacturing industry, is the major bottleneck in production. Final assembly, testing, and packing are the acronyms for final assembly, testing, and packing. In China, the vast majority of Apple gadgets go through this process. That’s why “Assembled in China” appears on our MacBook Pro, iPad, or iPhone.
About the $8 Billion Supply-Chain Blunder
The company’s most recent earnings report wasn’t entirely negative. Apple surpassed most Wall Street projections in the fiscal second quarter, which ended in March, and set an all-time high for revenue in a non-holiday sales period.
Revenue came in at $97 billion, exceeding the average forecast of $94 billion, while services sales surpassed $20 billion for the first time. The iPhone, of course, was the big moneymaker, bringing Apple over $50 billion in revenue—a little more than predicted.
Meanwhile, the company’s accessories section came in slightly lower than analyst expectations. Despite this, sales of the Apple Watch, AirPods, and other Apple products pushed the company’s revenue to nearly $9 billion. The iPad was the most significant negative in the second quarter. Despite exceeding Wall Street expectations, the product generated less than $8 billion and saw a year-over-year dip in sales.
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