iPhone Production Doesn’t Have To Stay In China

iPhone Production Doesn’t Have To Stay In China

June 30, 2019

The China-U.S. trade war has disrupted traditional supply chains with threatened (and partially implemented) tariffs on hundreds of Chinese exports.  The 25% tariff would impose a severe tax on Apple’s iPhone, its “most profitable product”.

Hon Hai Precision Industry, also known as the Taiwan contract manufacturer Foxconn, is the primary partner for Apple products.  According to their semiconductor division chief Young Liu, Hon Hai has sufficient production capacity outside China (estimated at 25%) if Apple asks its partner to relocate production outside of China.

Such a relocation for final assembly is described as “easy”, but not so the full production of components that go into the final product.  It would likely mean moving other assembly from non-U.S. companies back into China.  Currently, Foxconn is testing quality for mass production of the iPhone XR near Chennai.  Further, there is the future prospect of the Wisconsin plant to further diversify some aspects of the iPhone production.

To date, Apple has not announced any plans for such a change in its production strategy, but further uncertainty regarding the tariffs could change that.


Video Spotlight: Apple Doesn’t Need to Make All iPhones for U.S. in China


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USPS Delivers With Self-Driving Semis

USPS Delivers With Self-Driving Semis

A driver shortage is spurring demand for self-driving trucks that operate on highways on long-haul routes.  Interestingly, truck routes are less complicated for autonomous vehicles to maneuver than tricky urban city roads.

The United States Postal Service commissioned a two-week pilot test for TuSimple’s self-driving semis, to perfect the AI-based on-highway autonomous technology.

The semis were loaded with mail to complete five roundtrip runs between distribution facilities in Phoenix and Dallas.


Video Spotlight: Self-driving trucking start-up CFO on its new partnership with USPS


This post is based on the Forbes article, U.S. Postal Service Delivers Mail Using TuSimple’s Self-Driving Trucks, by Alan Ohnsman, May 21, 2019; and the YouTube video, Self-driving trucking start-up CFO on its new partnership with USPS, by CNBC Television, May 28, 2019. Image source: Chesky/Shutterstock

Discussion Questions:

1. What are the operational benefits of autonomous truck hauling services?

Guidance: One benefit is offsetting the shortage of human drivers. It should also save costs; large-scale commercialization of highway autonomous technology means higher productivity when using the truck as the input. Human drivers are limited by law to the number of hours they can drive, for safety reasons. Remove the driver Continue reading

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