China’s Henan province sees drop in smartphone exports as Apple diversifies manufacturing supply chain outside the mainland

China’s central Henan province, home to the world’s largest iPhone manufacturing complex in its capital Zhengzhou, reported a 60 per cent year-on-year drop in smartphone exports in the first quarter, showing the impact of Apple’s moves to diversify production outside the mainland.

Henan last year exported 57.6 million smartphones, down 14.5 per cent from 2022, as production resumed across all handset assembly facilities in Zhengzhou after Covid-19 control measures were lifted.

Those figures reflect a broad push by Apple’s suppliers, including primary iPhone assembler Foxconn Technology Group, to expand their manufacturing supply chain in markets such as Vietnam and India, the world’s most populous nation. India has been the world’s second-largest smartphone market since the third quarter of 2017, according to data from research firm Canalys.

Foxconn, formally known as Hon Hai Precision Industry, stepped up its diversification efforts last year after it struggled to keep up with production targets in late 2022 after it was hit by an exodus of workers, who fled over fears of coronavirus transmission, followed by violent protests over employee allowances.

In the aftermath of that fiasco in Zhengzhou, a top Henan official went on a charm offensive in February last year to convince Foxconn chairman and chief executive Liu Young-way to keep the Taiwanese firm’s local operations and investment in the province. Foxconn is the single largest importer and exporter in the province, according to a report by local newspaper Henan Daily.