Here’s one way Apple could benefit from the U.S.-China trade war

Harsh Chauhan for The Motley Fool:

The Nikkei Asian Review has reported that Apple has told its prominent suppliers to consider moving 15% to 30% of production capacity outside China to countries including India, Mexico, Vietnam, Indonesia, and Malaysia.

If Apple does decide to move a part of its production, it will have to leave behind a nicely integrated supply chain in China. But moving into a market such as India could be beneficial for Apple from a long-term perspective.

The global smartphone market fell 6.6% during the first quarter of 2019, according to IDC… But the Indian smartphone market was immune to this drop. IDC estimates that the Indian smartphone market grew 7.1% annually during the first quarter of 2019 as shipments crossed 32 million units. But Apple fell behind in the premium smartphone rankings in the country.

But Apple is missing out on all the fun because of one simple problem: a lack of manufacturing facilities in India.

MacDailyNews Take: The U.S.-China trade skirmish could indeed lead to Apple ending up smelling like a rose, especially if it indirectly helps to really solve Apple’s “Make in India” issue.

18 Comments

    1. Explain….

      You clearly do not understand the concept of trade if you think both sides always must come away with equal cash. Why do righties attack from the comfort of their Walmart and Amazon fueled imported chinese plastic lifestyles? You worship Apple, which is a prime example of a company that would rather do business with a communist dictator than open a factory in Trumpland.

      1. I disagree with your flawed logical assertion, TakeTrade – that Apple only has a binary choice between China and the U.S. under the Trump Administration. First, China has the deepest component supply chain and the massive factories and labor force to leverage it. Second, Apple began manufacturing devices in China a long time before Trump stained and befouled the office of President. Third, almost everyone is doing business with China. Singling out Apple is unfair, particularly since it would be far simpler to repatriate manufacturing jobs from many other business sectors than it would be to assemble iPhones en masse in the U.S.

        The day that you eliminate China-sourced products from your life is the day that you have the right to make those kinds of criticisms.

  1. “Apple, the social justice company. Apple would never abuse their workers by paying them anything less than a living wage, conscripting them to poor working conditions, or overworking them. Instead they pay someone else to abuse their work force. Love the hypocrisy

    We don’t have any manufacturing jobs in the US because we have criminalized all the working conditions that allow foreign manufactures to make a profit. Pollution, child labor, horrid work conditions, insanely low wages … no problem, Vietnam, China, India accept all those practices”

  2. “Its time for a new Apple. Jobs would lead the way if alive. AI and robotics has eliminated the cheap labor argument. For Cook at this point it is purely political and profit.”

    Whats amazing is that apple’s profit on these machines will be around 30-35%

  3. China vs India

    Economy : China $13 trillion India 2 trillion

    Per capita income : China $ 9600, India $2000
    (i.e. the average Chinese has 5 times the income of an Indian).

    Average selling price of phones in India is US $170.

  4. Apple has already tapped out all the smartphone markets it ever will. Every emerging nation going forward will be dominated by Android smartphones. Apple is too exclusive a company to slug it out with other competitive smartphone manufacturers. There will be nearly no iPhone sales in India or Africa. I find it quite frustrating to realize Apple will have to pass up hundreds of millions of potential customers due to high pricing of their products. I understand Apple’s predicament, so that why I think Apple should go after the enterprise markets wherever possible. Consumers are pretty much a lost cause in terms of Apple’s revenue growth. I was gravely mistaken in thinking Apple had an advantage in economies of scale with the iPhone. So far, I’m not sure if that was ever the case. My assumption was having economies of scale lowered prices but that has been quite the opposite with Apple, especially when it comes to iPhone pricing. I suppose only about 1% of the consumers in newly emerging nations will ever own an iPhone. That’s a darn shame.

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