The idea of introducing automation in a supply chain not only helps speed up the daily operations for many but also reduces the total headcount, which, in turn, lowers the overheads included in the production cost calculation. Apple is reportedly pursuing this trend and wants its suppliers to embrace this change. To ensure that these manufacturers will actually go through with what the company has asked, any member of the supplier chain that fails to invest in automation will risk losing out on future product contracts, including the iPhone.
On previous occasions, Apple could provide financial aid for its suppliers to help secure vital equipment; the latest report now claims that various supply chain partners are on their own
Sources close to DigiTimes informed the publication that Apple is requiring suppliers to switch to automation if they want to receive future orders. Using robotics at the assembly line will speed up manufacturing efficiency while reducing the total headcount to save millions. Unfortunately, in the past, the Cupertino firm would be more than willing to fund investments for its suppliers so they could get their hands on the necessary equipment to pick up the production pace.
At this time, this transition is something that suppliers will have to figure out for themselves. Companies who cannot finance this direction shift could lose out on future orders, putting their business at immense risk. Apple emphasizing the switch to automation could be due to the ongoing Trump tariffs, which will force the company to introduce a price hike to the iPhone 17 series that is scheduled to be announced on September 9.
Irrespective of how hard the company tries to reduce its dependency on China by shifting iPhone production to regions like India, the thousands of parts that comprise of a single device are still sourced from China, making it next to impossible for Apple to completely abandon the country as a supply chain hub. Since this decades-old supply chain will probably remain unbroken, the levies on each iPhone 17 arriving from overseas will make it costly for Apple, leaving it with little choice but to force its suppliers to switch to automation to boost production efficiency and lower costs.
The problem with this approach is that fewer workers will be stationed at an Apple production hub, which will reduce employment in the country. Governments of these countries might be forced to strong-arm the California-based giant to provide more opportunities, leaving Apple in a precarious situation. We will have to revisit how this automation plan works out several months from now, and we will return with more updates, so stay tuned.
News Source: DigiTimes
About the author: Omar Sohail is a reporter and analyst for Wccftech's mobile section, specializing in the technology and business of the mobile industry. His expertise lies in the intricate hardware supply chain, covering developments in semiconductor manufacturing, chip lithography, and camera sensor technology.
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