Apple Products To Be Produced In Malaysia? Here's Why We Think It Won't Happen

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Apple Products To Be Produced In Malaysia? Here’s Why We Think It Won’t Happen

As the trade war between the US and China heats up, US companies such as Apple are looking to avoid becoming the next Huawei. With China being a major production center for Apple devices, it’s no wonder there’s been talk about moving moving 15%-30% of their production capacity from China to Southeast Asia.

You may have probably heard about the report in the Nikkei Asian Review that the countries in consideration include Malaysia, Indonesia, Vietnam, India and Mexico. Given the lower currency and amount of labour workforce, India and Vietnam are among the favourites to be chosen.

While China is also a key market for Apples devices, seeing as the company got nearly 18% of its total revenue from Greater China in the quarter that ended March, the report states The iPhone maker has decided that the risks of depending too heavily on manufacturing in China is too great and is rising with each passing day.

So, realistically, what are the odds of Malaysia being chosen?

Rather slim I’d say. Big corporations like Apple are all about chasing the dollar and with production costs significantly cheaper in countries such as India and Vietnam, they have no real reason to set up base here.

Malaysia still stands a chance though, albeit a slim one, should our government offer incentives of the monetary kind to lure Apple’s manufacturing line here. But given the state of our economy and the fact that they had to open a bank account encouraging donations to help offset the debt from the shit show that was the 1MDB scandal, it’s looking unlikely. Should the government give incentives to Apple though, you can be rest assured that the rakyat are not going to be happy.

Regardless of which country they decide on though, it’s going to take a while to move their production from China over to other regions. Experts say it would take at least 2-3 years to move 15% of the iPhone production line out of China.

Nikkei also reported that a trade resolution between the US and china is unlikely to lead to a change in the company’s decision, though experts think that this is all a poker game and Apple is unlikely to want to diversify out of China. I guess we’ll just have to wait and see what happens at the G20 summit in Japan next week but one thing is for certain, Apple are not going to be moving their production line to Malaysia.