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The tech giant is urging its suppliers to adopt automation to stay competitive, as failure to do so could result in losing future product contracts, including those for the iPhone. According to sources close to DigiTimes, Apple now expects suppliers to finance their own automation investments rather than offering financial aid, a change from past practices.
Apple’s push for automation aims to boost manufacturing efficiency and reduce costs by cutting headcount. While in previous years, the company provided financial support for necessary equipment, this is no longer the case. Companies that cannot afford this transition risk losing orders, jeopardizing their business.
The move towards automation may be partly driven by the ongoing Trump tariffs, which could lead to a price hike on the iPhone 17 series scheduled for September 9. Even with efforts to shift production to regions like India, thousands of parts are still sourced from China, making complete reliance on other regions impractical.
This will likely increase costs per iPhone 17 due to levies on imported devices, forcing Apple to reduce dependency on China and boost production efficiency through automation. However, this approach could lead to reduced employment in countries where Apple produces its phones, potentially putting the company under pressure from local governments to create more jobs.
In summary, Apple is pressuring its suppliers to invest in automation to maintain their contracts, especially those related to the iPhone. The effectiveness of this strategy will be closely monitored, and updates will be provided as the situation develops.
