In a thought-provoking new book, the intricate relationship between Apple’s manufacturing strategies and China’s rapid economic ascent takes center stage. By offshoring much of its production to China, Apple not only transformed global supply chains but also turbocharged China’s technological and industrial development. However, this corporate strategy raises critical questions about its long-term consequences, with the book suggesting that such offshoring may have eroded America’s edge in technological innovation and potentially compromised its national security.
Planeloads of some of America’s best engineers flying to China to train its workforce in how to do advanced manufacturing. A jaw-dropping level of investment in China’s development, which puts the Marshall Plan to shame. When Apple came to China, the company proved instrumental in helping the country become a manufacturing juggernaut. And now one of America’s most valuable companies is awkwardly dependent on the production capabilities of a country that has become one of America’s biggest adversaries.
A new book from Financial Times journalist Patrick McGee, titled Apple in China: The Capture of the World’s Greatest Company, offers the wild story of how Apple became so deeply entangled with China.
For much of its early history, Apple had manufactured its products in America. After the company was founded in 1976, McGee writes, it employed Steve Jobs’ sister Patty to hand assemble its first computer’s circuit boards… When the money started pouring in, Apple set up a more legitimate factory in the Bay Area. While it did work with overseas suppliers on certain parts and products, the company was much slower and less willing than other computer companies to completely outsource and offshore production…
In 1999, Terry Gou, the head of a then little-known Taiwanese company named Foxconn, made a fateful phone call to a young operations executive who’d just joined Apple: Tim Cook… Foxconn had for years been a small-time supplier of cheap component parts for Apple, but it had recently proven itself in making the external housing for Apple’s Power Mac G4 desktop. Gou dreamed of a much grander relationship with the American company…
That’s when he called Tim Cook, whom he had previously worked with when Cook was at Compaq, an American computer company that was a big Foxconn client…
“Internal documents obtained for this book reveal that Apple’s investments in China reached $55 billion per year by 2015, an astronomical figure that doesn’t include the costs of components in Apple hardware.”
But money may not have even been Apple’s most valuable investment in China. It may have been teaching a massive workforce how to do advanced manufacturing. “Apple itself estimates that since 2008 it has trained at least 28 million workers — more people than the entire labor force of California,” McGee writes.
“This rapid consolidation reflects a transfer of technology and knowhow so consequential as to constitute a geopolitical event, like the fall of the Berlin Wall,” McGee argues.
But, really, it’s less like the fall of the Berlin Wall, which ushered in greater freedom and democracy. It’s more like if Corporate America had supercharged the economy of the Soviet Union.
MacDailyNews Take: Yup, although it’s nothing our regular readers haven’t been hearing from us for many years.
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 on Tuesday estimated that it would take as long as a decade for Apple to reduce its current near-total reliance on China to meaningful levels…
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.
The time to accelerate plans to move production out of China was November 9th 2016, but, hey, six years late is better than never! – MacDailyNews, December 4, 2022
It’s smart for both Apple and Foxconn to diversify assembly outside of China. There’s no sense having all of your eggs in one basket. — MacDailyNews, April 2, 2019
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Tim Cook’s deviant sexual preference have shielded him from nearly all ramifications, including firing, that other CEOs might face amidst a struggling stock price, missing AI, unfulfilled vaporware promises, false advertising, etc. offering him protection in an era where “diversity” is still a corporate shield. Hence, Cook’s endless touting of misguided DEI policies.
The days of deviant pervert behavior that praises all woke garbage that is destroying our soiceity is CCOMING TO A BIG END! That nasty altar of rainbow degenerate garbage in Apple’s courtyard is to be loaded up in a garbage truck and transported to the stinking dump nearest to this headquarters. Retire this deviant once and for all with whatever it takes, and find someone who is NORMAL. The sight of his fella makes me sick.
First off, that Rainbow Arch in the courtyard might be seen as a Pride Emblem now, but I seriously doubt it was seen as that when it was originally constructed.
It’s a tribute to the original apple logo, which was rainbow colored, long before Cook was part of the company and before the Pride Flag was created.
The rainbow logo was created in 1977 where as the Pride flag didnt come about until a year later in 1978.
What diversity label would you apply to Pete Hegseth?? Many people on both sides of the political spectrum have said he’s NOT qualified to be Sec of Defense. But, his qualifications don’t matter because he’s a white male, right??? It’s only when the person is not a white male and/or in Tim Cook’s case, when you don’t like his lifestyle, that they are DEI.
There are just as many white males as there are other people that may have jobs they are not qualified for, but when do you ever hear anyone using DEI against a white male. Racist much?
It’s hardly a stretch of logic and imagination that MERELY the production factor…marshaling/managing work-force, executing plans at such scale and demanding precision, that China couldn’t/wouldn’t transfer such skills to “capitalistic” production at least…say nothing of defensive/aggressive gains.
To not know, or acknowledge in the early stages is one thing, but only one tone-deaf, or bending to personal (company) gain would continue at the expense of their homeland.
I read an article a few yrs ago about what China demands of foreign companies…”sharing” of process/procedures/tech and my polly-anna mind thought; “Apple = can’t be”.
Apple’s support of their meme, “Think Different” has been in abidance with the other team. Richest company in the World bending over…has bent over, rather.
MacDaily News, why are you allowing such nasty comments from these ignorant people, Regular Reader and BigX, to stay up?? I think you have an obligation to your viewers from ALL backgrounds to come here and enjoy the site and not see such stuff.
Because MDN is letting normal people expose losers like you and all the rest who have been trying to pervert our society FOR LONG ENOUGH. ITS OVER BUDDY!
We are done with this transgender cancer, month-long perversion of all-things-homosexual, and DEI racist ideology THAT YOU REPRESENT BUDDY.
Get this …. IT IS ALL OVER NOW. NO MORE. We tolerate NORMAL PEOPLE. NO DAMN PERVERTS ANYMORE.
This is what happens when you have a short-sighted, naive person making those decisions.
But…”carbon-neutral by 2030″ is long-visioned?
I read the book. Apple is singled out maybe because they are the most successful company, but the offshoring of manufacturing to China had been going on for decades before Apple’s involvement. GE is maybe the most notable, as it started the offshoring craze long before, getting its appliances and other items manufactured there very cheaply.
Apple changed the game by teaching the Chinese the state of the art in materials, industrial design, as well as manufacturing. I don’t see an easy out for Apple at the moment. To re-create the Foxconn “iPhone City” over here will take many years, even if there was a will to do so.
Maybe the combination of robotics and AI will make it feasible in time.
I always have a question as to the productions of competing phones – Android phones which has a majority of the market to about 80% against iPhones’ around of 20%. Where are/were the Androids made to which we never heard about production, assembling and manufacturing schedules problem. Anyone has an answer to it?
To James F. Lee et alia,
It’s just that we expect Apple to have higher standards (and to stick by those standards) than those other manufacturers who we know, don’t really care where their phones are manufactured.
All I can say is thanks Tim, thanks a lot.