iPhone 14 has been a joint creation of China and the United States, Apple is difficult to leave China

This fall, for the first time, Apple will produce some of its iPhone flagships outside of China. It's a small but significant change for a company that has built one of the most complex supply chains in the world in China. But the development process for the upcoming iPhone 14 shows just how complicated it will be for Apple to actually leave China.

China and the United States create products together

The iPhone has been out for 15 years. Today, Apple's Chinese employees and suppliers are contributing more complex work and precision parts to the flagship than ever before, covering things like manufacturing design, speakers and batteries, people familiar with the matter said. As a result, the iPhone has gone from a "designed in California, made in China" product to a product created by both countries.

The critical work China has provided on iPhone development reflects the country's progress over the past decade and the new level of involvement Chinese engineers have had in iPhone development. After China lured companies to use its factories with relatively cheap labor and unparalleled production capacity, the country's engineers and suppliers have moved up the supply chain to get an extra piece of the pie from U.S. companies' spending on developing high-tech products.

China has taken on an increasing responsibility in iPhone development, potentially challenging Apple's efforts to reduce its dependence on China. Influenced by the external environment, Apple is trying to reduce its dependence on China.

Diversified Production Still Needs China

Apple plans to manufacture some of its iPhones in India, but Chinese companies with operations in the country will still play a key role. In Chennai, India, Chinese supplier Foxconn of Taiwan will lead the assembly of iPhones by Indian workers with the support of nearby mainland Chinese suppliers, including Leader Manufacturing, whose subsidiary supplies chargers and other components for the iPhone, people familiar with the matter said. China's BYD is also setting up display glass cutting operations in India, the people familiar with the matter said.

"They (Apple) want to diversify production, but it's a tough road," said Gene Munster, managing partner at venture capital firm Loup Ventures, "They're too dependent on China."

Apple would not comment. Foxconn, BYD and Leaders have not responded to requests for comment.