Apple’s bet on China looks increasingly risky, especially amid the country’s lockdowns in a quixotic quest for “Zero-COVID.”
I was at dinner last Friday when a Taiwanese businessman told me the story of his trouble with Chinese roads. “The driver that’s helping deliver my coffee beans in southern China has now been stuck on the highway for five days,” he said.
The delays were caused by widespread lockdowns and road closures intended to drive China’s coronavirus caseload down to zero.
It’s a nightmare scenario for any business. But imagine, now, that that driver was carrying components for Apple Inc.
Eventually, even Apple may not be immune to the logistical mess now afflicting parts of the country. Covid Zero policies have the potential to waylay the company’s hardware components, a scenario that could have rippling consequences, particularly during peak season when assemblers like Foxconn Technology Group and Quanta Computer Inc. need to secure all the components they can to make iPhones and Macbooks and ship the products.
Despite Chinese President Xi Jinping’s pledge in March that officials should reduce the economic impact from the country’s Covid Zero policies, China’s virus-curbing strategies have become unpredictable and volatile.
For evidence, look no further than the sweeping lockdown of 25 million residents in Shanghai, which has triggered food shortage concerns. It’s become clear that—as the country battles the virus—the economy has fallen far down Beijing’s list of priorities.
MacDailyNews Take: Clearly, Apple under Tim Cook had, has, and, for the foreseeable future, seems like it will continue to have far too much exposure to China and the CCP’s overbearing and often irrational whims.
As we wrote on March 15, 2022, “Memo to China: There’s no such thing as zero-COVID. Duh.”
As we’ve said for years now, for better and worse, Apple is wedded to China. It will take many years to even begin to extricate itself from this relationship, at least the the point where the company has some meaningful leverage that the CCP understands.
This situation has been building for years and, for the foreseeable future, will continue to get worse for Apple, not better.
As we wrote back in October 2019, even before COVID sprang from Wuhan, China:
There exists a dichotomy that screams hypocrisy that is impossible to overlook:
Apple CEO Tim Cook, winner of the Robert F. Kennedy Human Rights’ 2015 Ripple of Hope Award for “his lifelong commitment to human rights,” who subsequently took a place on the board Robert F. Kennedy Human Rights the following year, and winner of Newseum’s 2017 Free Expression Award in the Free Speech category, no less also aids and abets China’s commitment to violating human rights with serial regularity. Two phrases immediately spring to mind:
• Do as I say, not as I do.
• Talking the talk, but not walking the walk.Accepting awards, plaudits, and board positions for “free speech” and “human rights” while banning publications and protest apps are tough actions to reconcile due to their diametrically opposed nature.
For how long can Tim Cook, and by extension, Apple, get away with positioning themselves as the world’s white knight while kowtowing to every whim of the Chinese authoritarian socialist censors?
China is critical for Apple in every way from sales to product assembly, so Apple continues to kowtow to China. With Apple’s strong stance – in other places of the world – on users’ rights and privacy, it’s a bad look for the company and a tough tightrope that Tim Cook is trying to walk. — MacDailyNews, July 29, 2017
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