Is 2024 the year Apple’s crippling dependence on China, a situation engineered by CEO Tim Cook, finally blows up? Every move Apple makes to extricate itself from the corner into which Tim Cook painted it — every assembly plant, desperately and late, that’s opened in India, Vietnam, and anywhere outside of China — increases tensions with Chinese Communist Party-controlled China, a country in which Apple depends on maintaining huge iPhone and other products’ sales, but which can be turned off like a spigot at any time the CCP so desires.
Max Chafkin for Bloomberg Businessweek:
No American tech company has bet as heavily as Apple Inc. on the economic interdependence of China and the US. Apple needs Chinese workers to make its iPhones and Chinese consumers to buy them. This would seem to make the deteriorating relationship between the two global superpowers uniquely dangerous for the company and its chief executive officer, Tim Cook, who was responsible for Apple’s decision to outsource production to China long before he took over the top position from Steve Jobs in 2011.
While the company has floated above the geopolitical tumult, Apple enters 2024 in danger of getting dragged into it. That would be a poor omen for other US companies that face increased pressure from Beijing, in the form of both regulations and reinvigorated competition from domestic companies that Chinese policymakers have long sought to boost.
In September, Chinese government agencies in some cities told employees they were no longer allowed to bring Apple phones to their jobs, as part of a larger plan to keep the iPhone out of state-run offices. By December multiple state-backed companies and government departments in at least eight provinces had instructed employees to use devices made by local brands, a major step-up in the campaign…
Apple has sought to reiterate its commitment to the country, pointing out that its supply chain employs some 5 million people in China. During a March visit to Beijing, Cook gave a speech touting Apple’s “symbiotic” relationship with China.
Behind the scenes, though, Cook seems to be trying to hedge amid increasingly hostile rhetoric between China and the US, and concerns about the dangers of supply chain concentration… Apple has intensified its efforts to move some manufacturing to India and Southeast Asia… The supply chain diversification looks, at least in part, like a sensible attempt to reduce Apple’s exposure to geopolitical blowback. But it may be having the opposite effect. Apple is a major employer in China, and the government crackdown on iPhones could be seen as a warning about moving jobs out of the country.
MacDailyNews Take: As our own SteveJack wrote so concisely in April 2019:
Tim Cook is not the best person to be CEO of Apple.
Cook’s so-called achievements, besides betting the company pretty much entirely on China, using cheap Chinese labor to inflate Apple’s margins, are all based on the fumes of Steve Jobs’ innovations, including Apple Watch (a product for which, initially, Cook pitifully tried to take credit, but which began under Steve Jobs).
After what Steve Jobs built, a chimpanzee could run Apple profitably for many years. (Yes, even Steve Ballmer could do it.) — MacDailyNews, April 10, 2017
“Oh,” some might say, “but Tim has taken Apple to the very top!” Did he really? Or did he just ride Steve’s rocket? Imagine a CEO capable of adding his own fuel. How much higher and farther would that rocket be today?
Drew Bledsoe looked like a pretty good quarterback – until Tom Brady took over.
A visionary CEO would have taken the company far further than it is today. A visionary CEO would have recognized the potential of acquiring, say, a Netflix or a Tesla on the cheap. A visionary CEO wouldn’t today be desperately scrambling to come up with some homegrown generative AI, years late, as usual (see HomePod). A visionary CEO would have recognized the threat that China posed to his company and worked to extricate his company far sooner.
Tim Cook is reactive, not proactive.
If you think Tim Cook came up with the idea for the Vision Pro, you haven’t been paying attention.
Tim Cook couldn’t see it then. Tim Cook can’t see it now. Tim Cook won’t be able to see it tomorrow.
Tim’s not a product person, per se. – Steve Jobs
A visionary CEO would generate excitement, anticipation, and wonder. Instead we have all of the thrill of a conveyor belt, slowly moving, sometimes not even, for 12+ years and counting.
Someday, hopefully sooner than later, watching the paint dry will blessedly be over. Steve Jobs painted a masterpiece. Tim Cook stands there fanning it.
Hopefully, 2024 will deliver new energy to the company. – MacDailyNews, December 29, 2023
Imagine live keynotes, multiple times per year, revealing exciting, surprising products, delivered on stage by a CEO capable of sparking wonder and excitement in his own right. Instead, we endured years of sleep-inducing keynotes which have now devolved into canned, pre-recorded, highly edited industrial videos because the CEO couldn’t do them well live.
As we wrote back in November 2022:
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.
Read more:
• Tim Cook firmly latched Apple onto China’s CCP teat. What’s his plan for weaning it off? – November 2, 2022
• Four U.S. Congressmen: Apple is ‘a pawn in China’s malfeasance’ – May 21, 2021
• Tim Cook’s Apple is built in China; now it has to answer to the Chinese Communist Party – May 17, 2021
• Apple CEO Tim Cook’s continued kowtowing to China is a very bad look – October 10, 2019
• Why Apple CEO Tim Cook capitulates to China: Money and power – August 14, 2017
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Ok. Who then?
Wrong question. You pose a gotcha question, hoping for a name, so you can nitpick it to death.
How about a CEO who’s dynamic, who’s run innovative companies, who’s curious, who recognizes game-changing technologies ahead of the curve, who can pull the trigger on meaningful acquisitions… or how about even one who can take some of Apple’s money and charge his staff with making a personal assistant that actually works after 12 years of laughable failure?
Not meant as a nitpick gotcha. The only CEO who’s temperament and vision I think works in the Apple culture that I could imagine being a good fit and giving Apple the kind of leadership being advocated in this article would be Marc Benioff but this a weakly held strong belief on my part 😉
Benioff is thoroughly DEI/ESG deluded…like Cook (and Harvard’s Gay). Such a priority should automatically make a candidate SOL.
Instead, chose someone that is able to sidestep such diversions and hunger for true innovation re: products and productions (assuming AAPL continues with content). Time to jettison marxian-capitalists.
It will take a decade or longer for India, Southeast Asia, Mexico to ramp up manufacturing scale/ quality and manufacturing scale/ quality. Keep in mind that very little of the “over-dependence on China” talk addresses the issue of what Apple (and the rest of the planet) will do if it (we all) lose access to TMCM’s high-end chips from Taiwan. No, a plant in Arizona ain’t gonna help. Oh, and don’t forget that China already has a stranglehold on a big chunk of the lithium supply. Moving manufacturing and assembly out of China is both a business and geopolitical issue. It isn’t as simple as blaming Tim. Who will keep China in check? Who and how? An when?! I’m sure Joe has everything under control. Elections have consequences.
Tim Cook moved Apple into China. It’s his entire claim to fame. It’s why he was named CEO. Cook deserves the bulk of the blame because instead of seriously working to diversify production, he kept telling himself to think happy thoughts so he could keep riding the CCP gravy train or, worse, because he, not being a visionary, couldn’t see the issue with Apple’s CCP dependency at all.
Where else were Steve and Tim supposed to move Apple into years ago? Should Apple begin buying their chips from Seoul? Hello Snapdragon! Does Tim deserve the bulk (or any) of the credit for enabling Apple (and the AAPL $hareholder$) to earn trillion$? Is Joe gonna stand up to commie China to protect the world’s access to the best chips? Or should we just buy those from AZ in the US?
Tim Cook is too worried about blowing Apple’s cash on a socialist global wealth redistribution hoax, either because he’s a dupe or he’s in on the scam.
The death grip China has on Apple’s supply chain is startling, especially in light of Jobs’ tenant that Apple should seek to “have control over the whole widget.” Tim Cook only has himself to blame for not addressing this sooner, like a decade or two ago. Did/Does anyone really expect China to become more liberal/democratic/tolerant just because they are getting richer?
But I would remind readers of two things:
Cook absolutely rescued Apple from near-destruction back in the 90s, when Jobs brought him in from Compaq to fix the supply chain. Remember the “good-ol-days” before Cook when Apple would have warehouses full of crap-computers which no one wanted combined with months-long waiting times for the ones that were good? I do, and I’m glad those day are a distant memory, thanks to Cook.
Cook may not be an “innovator” but he has continued to foster Apple’s relentless “iteration” which has been just as important to Apple’s success. Look at the Apple Watch, not a single annual “upgrade” has been earth-shattering, but taken all together, the current Watch is a radical improvement on the original model. So many companies fail follow this simple principle: continue to make one or two respectable upgrades to your products on a regular basis, upgrades don’t have to be revolutionary, just something that makes the product more fun or more useful or more of a bargain. (Unfortunately Apple hasn’t followed this path with the AppleTV.)
But yeah, get out of China. Long overdue.
Still haven’t heard anyone offer up a candidate though. Is no one willing to go out on a limb for their favorite candidate? Slings and arrows avoided at all costs? I’m genuinely curious about who might be a good choice. Internal or external?
Did the world learn NOTHING from the pandemic? China should be shunned!
Money covers up every transgression