Recently, foreign media reported that Apple will set up a factory in Indonesia to produce iPhones with an investment of up to $1 billion. Apple will not only set up a factory in Indonesia but will also require its suppliers to set up local factories. As a result, Apple will produce iPhones in India, Vietnam, Indonesia, Mexico, and other places outside China.

Apple has previously produced iPhones in Vietnam, Mexico, India, and other places. Among them, India ranks second only to China in iPhone production, accounting for approximately 12.5% of global iPhone production, while China produces more than 70%. However, a few years ago, China produced over 90% of global iPhone output.

Apple's decision to produce iPhones outside China is partly to ensure production security. Due to geopolitical influences, Apple has long been promoting plans to decentralize iPhone manufacturing. Currently, its production in India is considered the most successful. Vietnam and Mexico's resources pale in comparison to India and China, resulting in a lower proportion of iPhone production.

Another reason for advancing iPhone manufacturing outside China is to reduce costs. Labor costs in India and Vietnam are relatively low, with India's estimated to be about one-third of China's, further reducing iPhone manufacturing costs.

Apple's manufacturing in India also meets Indian requirements. India mandates that all foreign mobile phone companies manufacture locally, or face significantly increased import tariffs or even a sales ban. Consequently, both Chinese mobile phone companies and Apple produce phones in India, a market with immense potential that these companies are reluctant to abandon.

Seeing India's success, Indonesia, the fourth most populous country globally, has followed suit, requiring many mobile phone companies selling in Indonesia to set up local factories. Previously, several Chinese mobile phone companies have done so under Indonesian requirements, and now Apple is also under pressure to follow suit.

It is reported that Apple has agreed to invest in a factory in Indonesia, with the investment amount significantly increased from an initial $100 million to $1 billion, indicating a considerable scale for the local factory. Given Indonesia's population of 270 million, the factory's size will not be small, and Apple may even sell iPhones produced in Indonesia to European and American markets.

Apple's plan to set up a factory in Indonesia aligns with its decentralization strategy. Indonesia's resources are much richer than Vietnam and Mexico, and its production costs are much lower than Vietnam's. As an island nation with developed maritime transportation, Indonesia is well-suited for shipping iPhones globally and transporting global components to Indonesia, with relatively low transportation costs.

It is reported that Apple's plan for the Indonesian factory is substantial, extending beyond iPhone assembly to requiring multiple suppliers to set up factories in Indonesia. This meets Indonesian requirements and aligns with Apple's strategic direction. The large investment scale has surprised the industry, potentially making Indonesia the second-largest iPhone producer after India.

It seems inevitable that Apple will reduce the proportion of iPhones made in China. The proportion of iPhones made in China may further decline in the future. However, Apple has stated that iPhones sold in the Chinese market will be ensured to be made in China. Given China's vast market and complete industrial chain, it is estimated that the majority of iPhones will continue to be made in China in the coming years, and the quality of Chinese-made iPhones is much higher than that of overseas production.