More Chinese agencies and state-backed companies across the country have asked their staff to not bring Apple iPhones and other foreign devices to work, Bloomberg News reports Friday, citing “people familiar with the matter.”
Multiple state firms and government departments across at least eight provinces — including the prosperous coast — instructed employees in the past month or two to start carrying local brands, according to people familiar with the matter. That’s a major step-up from around September, when a small number of agencies in Beijing and Tianjin began telling staff to leave foreign devices at home, said the people, who asked not to be identified discussing confidential orders.
The much broader, coordinated effort marks a dramatic quickening of Beijing’s campaign to wean itself off American technology, coinciding with the resurgent popularity of homegrown brand Huawei Technologies Co. Xi Jinping’s administration this year decided to expand a ban on foreign devices beyond the most sensitive departments — a directive that had been in place for years — to encompass many more government agencies and even state firms, Bloomberg News reported in September…
Apple gets the majority of the world’s iPhones from sprawling factories run by suppliers like Foxconn Technology Group that together employ millions of Chinese. Chief Executive Officer Tim Cook was the architect of the company’s strategy to outsource manufacturing to China two decades ago. He has worked hard since to maintain positive ties with Beijing, even as Apple has begun shifting more production capacity to other countries including India.
MacDailyNews Take: Sounds like Tim Cook’s latest Chinese Communist Party ass-kissing tour failed to achieve its desired effect.
As we wrote last November:
In 2016, Apple’s “Operations Genius,” Tim Cook, secretly signed a secret agreement with the human rights-abusing Chinese Communist Party estimated to be worth more than $275 billion. Cook promised that Apple would do its part to develop China’s economy and technological prowess via infrastructure investments, business deals, and worker training in exchange for the CCP quashing its surge of what promised to be crippling regulatory actions against Apple, The Information reported last December.
Many years before that, some two decades ago, it was Cook who spearheaded Apple’s move to make products “Designed in California,” but “Assembled in China.”
Since Cook, 62, made his $275 billion secret deal with the CCP five years ago, and as he now nears retirement age, Apple has made precious little headway in diversifying its production away from capricious, authoritarian China.
Why?
If the $275 billion wasn’t to buy Apple half a decade to free itself by diversifying its production away from China, mitigating risk, what was it for?
Longtime Apple analyst Gene Munster [in November 2022] estimated that it would take as long as a decade for Apple to reduce its current near-total reliance on China to meaningful levels.
At the current rate, it doesn’t look like Apple has 10 months, much less 10 years to extricate itself from China.
Tim Cook painted Apple into this corner. It worked marvelously well, until it didn’t.
A publicly traded company CEO’s job is to act in the best interest of its shareholders.
But, Apple’s operations don’t scream “genius” today. They scream “RISK!” But, you know, the market just loooves risk.
Apple shareholders and, in turn, Apple’s rubber-stamping Board of Lackeys, should hold one person responsible if this spiraling China dilemma continues deteriorate: Timothy D. Cook.
So, what’s Cook’s plan for getting the company out of this boxed-in predicament into which he placed it? Certainly Apple shareholders have a right to know.
Hopefully, Cook has a better plan than simply cashing out and dumping this nightmarish quandary into the lap of Apple’s next CEO.
See also: Tim Cook firmly latched Apple onto China’s CCP teat. What’s his plan for weaning it off? – November 2, 2022
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Everybody is a monday-night quarterback, including MDN, I guess. Tim Cook/Apple has had no choice but put all its eggs into the Chinese basket as that was the only place with qualified, low-cost labor. That’s why all the other phone manufacturers were in China too! And that’s why most of the supply chain partners were in China as well.
Apple has been trying to diversify out of China for ages – even 10 years ago, they tried to get into India. But India, if I recall, wouldn’t let them manufacture there unless stores and factories were owned by Indian companies (taking a bit of a play-book out of China’s playbook). And they’ve finally overcome the many obstacles and have begun building some iPhones there.
Where else could Apple have diversified to in monday-night-quarterback’s opinion? The US, Europe? Neither had cheap labor nor factories nor supply chain partners that could supply the parts.
Now to China: Apple, similar to Tesla, is becoming a pawn in US/China political rivalry. In my opinion, China is just sending a message at this point. It’s not like it’s forbidding everyone from owning iPhones – for now. But it doesn’t really have to: my in-laws there have noticed more people abandoning iPhone for Huawei because of the way the US has treated the latter and other “uppidy” Chinese companies. This will become more pronounced – and show up in Apple’s quarterly results sooner or later.
Tim Cook gives two main reasons for manufacturing in China and low labor costs isn’t one of them. Cook says,
“The number one reason why we like to be in China is the people. China has extraordinary skills.”
And again,
“But for us, the number one attraction is the quality of the people.”
This is troubling on many levels, but his second reason is even more bothersome to anyone concerned about security or China’s nefarious actions in the world. Cook says,
“And the part that’s the most unknown is there’s almost two million application developers in China that write apps for the iOS App Store.”
Cook adds,
“These are some of the most innovative mobile apps in the world, and the entrepreneurs that run them are some of the most inspiring and entrepreneurial in the world. Those are sold not only here but exported around the world.”
Given how much China seeks geopolitical and economic superiority over the west and especially the USA, can anyone believe this is a good idea?
The Trojan Horse has become the Xi Horse.
Read more here. https://www.inc.com/glenn-leibowitz/apple-ceo-tim-cook-this-is-number-1-reason-we-make-iphones-in-china-its-not-what-you-think.html
Says the guy playing quarterback for Thurs-night game. The irony: calling out the Monday night’s calls, but then corrects all with his own. Side arm thrown…nice.
For years I have read volumes of APPLE APOLOGIST ramblings, but your blindness and excuse making earns a top rating.
Examples:
“Everybody is a monday-night quarterback” The proper terminology: Monday morning quarterback. Yup, you should know after reading your fiction. But the best is MDN who leads from the front, not behind as you stated.
“Tim Cook/Apple has had no choice but put all its eggs into the Chinese basket…” You lost ALL credibility with that ridiculous and DANGEROUS opinion that puts the company in serious risk.
“Apple has been trying to diversify out of China for ages.” Trying? YODA: There is no try, only DO or DO NOT. Total Bullspit! Cook dragging his feet for years and passed at openings. President Trump invited Cook on a White House business table offering incentives to bring manufacturing back to USA. This was over five years ago and Cook REFUSES to reverse his disastrous position for twenty years now. Cook and other CEOS have ruined the manufacturing industry in the U.S. for cheap slave labor and massive profits.
“China: Apple, similar to Tesla, is becoming a pawn in US/China political rivalry.” What concocted baloney are you selling? You don’t specify U.S. treatment of Chinese companies because you have nothing but hot air. The reason Chinese businesses and citizens are giving up iPhones is because of national party directives and fear of their government leaders. Get a grip, sonny.
Bottom Line TW: Just because you believe your apologist opinions, does not make them TRUE and certainly short of REALITY…
It is literally a fact that Apple has been trying to get into India for 10+ years and has begun manufacturing there as early as six years ago. Bottom line, GoeB, just because you can’t tell fiction from fact, doesn’t mean fiction wins.
HA! Your highly opinionated VOLUME OF FICTION and all the points I refuted — NO ANSWER. So, the typical deflection tactic when one is called out cherry pick one point. Well, how long they have been trying to get into India is MINUTIAE to the overall of Cook’s biggest mistake — all eggs in the China basket and his FAILURE to correct after 20 years is the bottom line. Fanboy navel gaze at your titanium iPhone and leave REALITY to the adults…
You can never trust a Communist.
Of course, because China is able to spy on their citizens through local phones while iPhones are roundly secure.
Bingo!
Sniff test. Someone or some group is looking for an Apple buying opportunity….citing “people familiar with the matter.” LOLOL
I’ll bet dollars to dog biscuits the real reason is that those phones are harder to spy on then ones from Chinese companies!
You’re mis-interpreting the point completely. This isn’t targeted at the iPhone – it’s targeted at all foreign phones. It’s also not about commerce. It’s about ensuring that people in these positions use Chinese phones – because those phones are able to be infused with state-mandated spyware.
But… but… iPhones are all we see with our heart’s eye! Outside China, there is only one phone, the iPhone, and only one country… ‘merica!
Bad take. Apple has had to manufacture in China for the same reason the other tech companies do: it’s not just the cost of labor, but the skill of the labor. Tim noted:
“There’s a confusion about China. The popular conception is that companies come to China because of low labor cost. I’m not sure what part of China they go to, but the truth is China stopped being the low-labor-cost country many years ago. And that is not the reason to come to China from a supply point of view. The reason is because of the skill, and the quantity of skill in one location and the type of skill it is.
The products we do require really advanced tooling, and the precision that you have to have, the tooling and working with the materials that we do are state of the art. And the tooling skill is very deep here. In the U.S., you could have a meeting of tooling engineers and I’m not sure we could fill the room. In China, you could fill multiple football fields.
First they took their Panda’s back. Now this. War in Taiwan is imminent.
Not everything is about war. They took their Pandas back because the zookeepers were too incompetent. One was dead & and another was terribly emancipated in Tennessee. He had to be shipped home for proper care.