What makes this worse is the changing goal posts in play. 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 management will know this, and will no doubt be saddened at the lack of pragmatism.
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. He will join Meta’s own AI development efforts.
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