Apple’s new love affair with India leaves China sweating

“Apple CEO Tim Cook’s surprise first trip to India last week may be firmly in the history books, but it’s still front page news in the Chinese headlines, revealing an unexpected angst in the world’s biggest smartphone market,” Doug Young writes for Forbes. “China has grown accustomed to being at the center of Apple’s universe, as Cook has made numerous trips to the country over the last three years in a bid to curry favor with Beijing and Chinese consumers. So the sudden trip to India, a rival with China in many ways, appears to be causing some unexpected sweating by Chinese who worry they may soon lose their spot as the leading object of Apple’s affections.”

“The second headline that caught my eye also came out this week, and has Chinese media fixating on the fact that Terry Gou, chief executive FIH Mobile’s Taiwanese parent, accompanied Cook on the trip to India,” Young writes. “That article also leads with the sensational headline questioning whether India could soon take China’s place as Apple’s main manufacturing base.”

Young writes, “The eventual movement of iPhone manufacturing to India and other low-cost locations is almost inevitable, and some might say should even be a source of pride for China since it shows the country is past that stage of development.”

Read more in the full article here.

MacDailyNews Take: It’s one thing to begin exiting China when the time comes and their economy has matured beyond required millions of menial factory assembly jobs, it’s quite another for an overwrought government to push Apple out too soon.

The Chinese totalitarians should never forget that Apple products need not be assembled in China. — MacDailyNews, April 22, 2016

China has a lot more to lose than they have to gain by slamming the door on Apple. — MacDailyNews, April 22, 2016

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  1. You cannot overestimate how much the Chinese and Indians hate each other. My company has facilities in both China and India and I can sit back and watch people from each location try to sabotage each other. It really is amazing.

    1. Agreed 100%. I’ve worked in both countries and have had many dealings with people from both nations and the rivalry between them is all too clear.

      Apple could turn that rivalry to it’s advantage by playing one against the other, but if it cosies up too much with one, it risks alienating the other. It will call for a very careful balancing act, but that’s the sort of thing that Apple does better than most.

    2. Even China is not monolithic. A friend manages a Chinese product and mold design group in Southern China and the “Hong Kongese” almost refuse to work with Chinese.

      It makes for conflicts that we don’t think about in the US.

  2. China is prone to suddenly changing their rules and disrupting plans that appeared to have been settled; witness the abrupt way that China recently banned Apple’s iTunes and ibook services.

    While China may be a valuable customer and a great partner for manufacturing, there will always be a capricious side to how Chine operates and of all people I suspect that Tim Cook is more annoyed with that than most people would be. He needs reliability and predictability.

    Therefore having a second string to their bow is obviously a very attractive proposition for Apple, but they also need to bear in mind that India too can be a very mercurial operator.

    It looked like the special exception allowing Apple stores to operate in India was in the bag and all of a sudden it has been overturned. It may be just a little detail that will be rapidly resolved, it could be that somebody is expecting a substantial bribe, or it may be indicative that dealing with India is not going to be straightforward.

    It certainly does Apple no harm for China to know that Apple is talking to India about Apple stores and iPhone assembly, but equally it wouldn’t be a bad thing if Apple made it abundantly clear to India that Apple can bring a lot of employment and money to India, but only if it is going to be a harmonious relationship.

  3. “…some might say should even be a source of pride for China since it shows the country is past that stage of development.”

    Sure, fewer jobs, less prestige, tech industry languishes without the easy copying within their own borders and of course pride before fall.

    1. I once was going to work on an animation feature in China but they don’t like even relatively modest Western salary demands at ALL! Plus they reneged on the deal they gave my director friend so he quit and left leaving me no real reason to keep pursuing the project. The reason they wanted some Westerners on the project to begin with was to give their animated films more global appeal. So now they got nothin’. Sometimes they cut off their noses to spite their faces. And a lot of it is cultural and the dubious sense of fair play and keeping to the deal they strike.

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