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Apple (NASDAQ:AAPL) had instructed its managers to reduce the number of workers on iPhone final assembly lines by up to 50% in the coming years, The Information reported, citing two former Apple employees.
In November 2022, police officers in a A factory in Zhengzhou, China, had clashes with workers protesting strict COVID-19 lockdowns and wage disputes. Disruptions at the factory, operated by Foxconn Technology (OTCPK: FXCOF) — caused iPhone shortages, leading to a drop in sales of the phone during the holiday season, according to the report. aggregate.
After the incident, Sabih Khan, Apple’s senior vice president of operations, ordered managers to reduce the number of workers on iPhone final assembly lines by up to 50% over the next few years.
To achieve this, the American tech giant began approving automation projects for its assembly lines, which had previously been halted due to high upfront costs, the report notes.
The move led to a significant amount of automation in handling the final assembly of the iPhone 15, the report added, citing three people involved in its manufacturing.
If Apple is able to more fully automate iPhone manufacturing, it could move more of its manufacturing operations from China to countries like Vietnam and India, where experienced manufacturing engineers are hard to come by, the report notes, citing former Apple managers. Apple manufacturing.
In April, Apple reportedly doubled its production of iPhones in India, assembling about $14 billion worth of phones last fiscal year, a sign that the company is accelerating its push to diversify beyond China. The company now manufactures almost 14% or about 1 in 7 of its iPhones in India. Foxconn, formally known as Hon Hai Precision (OTCPK:HNHAF) (OTCPK:HNHPF), assembled about 67% of iPhones made in India in the fiscal year ending March 2024.
Reducing its dependence on China has become vital for Apple due to labor disruptions and rising trade tensions between the United States, China and Taiwan.
Apple already appears to have begun reducing the number of workers manufacturing its devices in China. Earlier this year, Apple noted in an annual report on its supply chain that the total number of employees it monitors at its manufacturing partners for compliance with working hours decreased to more than 1.4 million in 2023 from a peak of more than 1.6 million in 2022.
It was the first time these numbers decreased year-over-year in more than a decade since the company published the reports. Employee numbers fell even as the number of Apple monitor factories rose to more than 380 from more than 300 a year earlier.
Apple has started buying machine learning startups to help it replace the people who inspect products on its assembly lines. Earlier this year, it acquired Canada-based DarwinAI, which uses computer vision to inspect parts such as printed circuit boards for defects.
The startup also created small machine learning models that can run on iPhones. If iPhones could test themselves, Apple would not need to purchase large-scale testing tools, the report notes.
Apple also bought Palo Alto, California-based Drishti, which helps it analyze video footage of its assembly lines to identify bottlenecks and manufacturing problems in real time, according to the report.
Over the years, iPhones have become difficult to assemble as they have become more sophisticated. High turnover at phone assembly facilities in China meant that Apple and its partners had to break down smartphone assembly into simpler tasks to make it easier for inexperienced staff to complete them.
However, this also meant that the total number of people at iPhone facilities continued to increase as the company added more stations on assembly lines to perform simpler tasks, according to the report.
In internal Apple meetings, a topic of discussion was the distaste that Apple CEO Tim Cook and COO Jeff Williams have for fully automated assembly lines, due to their experience at IBM in the 1990s. where they previously worked.
Apple found it difficult to justify the cost of machines that can only be used for a year before the iPhone design is updated, which would lead to the machines becoming obsolete.