Apple is diversifying manufacturing outside China by establishing a facility in Thailand and shifting iPhone production to India. However, the US government has now demanded production moves to the US, which may not be entirely feasible due to a lack of essential skills, materials, and infrastructure. Consequently, Apple risks suffering impacts on both its hardware and software arms. Ongoing issues with Apple Intelligence are compounded by key AI talent leaving for competitors, highlighting significant challenges for the company's future.
Apple has evidently listened to calls to diversify manufacturing outside China; it set up its first Apple Watch manufacturing facility in Thailand in 2022 and has been engaged in - and spent billions on doing - a switch to India for iPhone.
The US government now appears to have changed the target somewhat and insists not only on moving outside of China, but of moving production to the US. That's an ambition likely to be only partially possible at best, given lack of key skills, raw materials, components, and infrastructure.
Apple's hardware business will suffer as a result. It looks like its software and services arm will feel the pinch, as well.
The company's long-term problems with Apple Intelligence just won't go away, and as we hear speculation that some of the company's key AI developers are unhappy that Apple may move to adopt third-party services; the leader of its Foundation Models group, Ruoming Pang, is leaving, poached by big money from Meta.
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