Rumor: Apple Will Expand Automated Production for Next-Generation iPhone

Source: Apple.com

Apple (NASDAQ:AAPL) has plans to fully automate the manufacture and production of its iPhone batteries in 2014, according to the latest supply chain rumors from DigiTimes. According to “upstream supply chain” sources cited by the Taiwan-based media outlet, Apple’s move toward fully automated production lines is the result of steadily increasing labor costs in China. “With rising minimum wages in China and the fact that younger workers are unwilling to work in the manufacturing industry, labor shortages and high turnover rates are common in the industry, which has increased costs,” one unnamed source said to the publication.

The timing of the change means that the so-called “iPhone 6” would be the first iPhone model to have its batteries manufactured under the new process. As reported by DigiTimes, Apple has already automated much of the production process for its Mac Pro and iMac products. Only the products’ basic materials and final assembly require human labor.

Several media outlets have published rumors that suggest Apple will be releasing the next-generation iPhone in two larger screen sizes. Last month, The Wall Street Journal said that one of the upcoming iPhone models will feature a screen size larger than 4.5 inches and that the other will have a phablet-sized screen larger than 5 inches. More recently, a third-party iPhone case maker from Japan posted an image of an iPhone 6 case, reports BGR.

The size of the case suggests that Apple will expand the iPhone’s screen size by making the device taller rather than wider. Third-party case makers have sometimes been able to obtain specifications for upcoming iPhones before they are released in order to get a manufacturing head start on their competitors.

Although the move toward automation is supposedly driven by increased labor costs, DigiTimes’ sources noted that Apple is not expected to shift its manufacturing base out of China. “China is currently still the top choice for setting up a manufacturing base for IT brand vendors, as Southeast Asia still have issues such as constant labor strikes and limited infrastructure,” said one source.

Most of Apple’s suppliers are located in Taiwan and China, which gives the California-based company another reason to keep its manufacturing base in the area. According to a recent report from The Wall Street Journal, Apple is pulling together a team of engineers and supply chain managers in Asia in a bid to accelerate the development of new products and future iterations of iPhones.

That move also suggests that Apple has no near-term plans to shift its automated production lines to another country. It should be noted that DigiTimes has a mixed track record when it comes to the accuracy of its Apple rumors. 

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