Apple eyes R&D centers outside China

April 21, 2022

Advanced manufacturing in mainland China has been one of the major sources of Apple's success these past two decades.

But it's increasingly a fraught position. There are political considerations, of course, but also strict COVID-19 lockdowns, which already delayed several of Apple's products (including last year's iPhone 13 launch).

Now new shutdowns promise to do the same thing to the iPhone 14, expected in the fall.

In response, Apple is looking at creating some new R&D centers -- known as New Product Introduction facilities -- in other countries.

NPI offices work closely with local manufacturers to create fast and efficient manufacturing lines. If Apple is shifting its NPI centers, it must also be shifting some of its manufacturing. Apple already makes some iPhones in India. And Foxconn, its main partner, operates facilities all over the world.

The move may signal a long-overdue shift toward making more Apple products in other countries.

You know what they say about having all your eggs in one basket.

-- Leander Kahney, EIC

Apple will increase the number of countries where it does an important phase in developing products, according to a industry analyst. Currently, its R&D-oriented New Product Introduction (NPI) sites are in China, but the company plans to build NPI offices in other places as well. Recent COVID-19 shutdowns — which have disrupted several recent products -- are supposedly the reason for the change.

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"My observation is that the doers are the major thinkers. The people that really create the things that change this industry are both the thinker and doer in one person. And if we really go back and we examine, you know, did Leonardo have a guy off to the side that was thinking five years out in the future what he would paint or the technology he would use to paint it, of course not. Leonardo was the artist but he also mixed all his own paints. He also was a fairly good chemist. He knew about pigments, knew about human anatomy. And combining all of those skills together, the art and the science, the thinking and the doing, was what resulted in the exceptional result. And there is no difference in our industry. The people that have really made the contributions have been the thinkers and the doers. And a lot of people of course -- it's very easy to take credit for the thinking. The doing is more concrete. But somebody, it's very easy to say, 'Oh I thought of this three years ago.' But usually when you dig a little deeper, you find that the people that really did it were also the people that really worked through the hard intellectual problems as well." -- Steve Jobs

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