Apple has spent many years happily profiting from cheap Chinese manufacturing, labor, electrial engineering expertise and supply chains to the point where they are now completely beholden to a foreign country. A country whose increasing rivalry with the US in economic power and geopolitical influence (along with increased tensions) has been clear for well over a decade.
Apple is diversifying a bit into India and elsewhere (Vietnam I think?), but China could throw Apple into a huge crisis tomorrow if they were cut off, since it would take years to ramp up capacity elsewhere, and sourcing many of the components would be next to impossible.
And Apple really couldn't blame anyone but themselves for it.
It also seems to me like the are diversifying more because India demanded it and for price, rather than tho reduce dependencies ok China. But that's just unqualified guesswork.
Up to a point there's a cost advantage, but Tim Cook has also pointed that Apple uses Chinese factories because it allows them to take advantage of the local manufacturing capabilities, which are substantial. [0] In fact to hear him tell it those capabilities are simply not available elsewhere. I take him at his word on this topic at least.
[0] https://www.inc.com/glenn-leibowitz/apple-ceo-tim-cook-this-...
[1] https://www.businessinsider.com/apple-tim-cook-275-billion-c...
One of the tooling engineers that had previously worked with Apple before they were offshored said, "Well, we couldn't wait around for him to come back to us, we have to eat too so we switched to making different things. He's welcome to invest in our production and we'll make whatever he wants"
Cook loves helping out China, not sure why. /s
While Apple may have had to spend money setting up the specific assembly line, fabrication plants, train staff, etc because they simply didn't exist prior to their requirement, the fact that they were able to set it up someplace, and continuously feed raw materials, parts, labour etc with dozens of redundant suppliers for EACH component, is what indicates manufacturing capability.
Manufacturing is more ecosystem than "capability".
This is a huge overlooked factor in all of the debate regarding the supply chain.
You can't "just move" manufacturing capabilities from one place to another, and debate the labor costs. Rather, probably more importantly, there's actually a _skills supply_ problem.
[1] https://www.business-standard.com/article/companies/apple-in...
0: https://www.just-style.com/analysis/analysis-china-market-sh...
Want to build your own x86 Chios? Guess what? You can't because Intel/and won't let you and even if they did , if it were one of the "not our allies list" people, the govt will step in. Same for Netherlands fab machine makers. They dictate who can they sell to or not..
That is why nations are investing in stuff like risc-v.
Tomorrow MasterCard/visa can be "ordered by govt " to pull out of a country and suddenly their card economy collapses. Unless they have an alternative, like India does with rupay or UPI which is being exported to other countries as a technology they can locally implement.
Same for stuff like aws or Google or github or basically the entire american internet giants.
You know if tomorrow whatsapp is ordered to stop service in say India what will happen? Without a local alternative already in place, WhatsApp and ipso facto us govt can literally hold that country for ransom. Whatsapp is a silly example but think about it.
Sure China is bad for labour but its not like Americans aren't fighting anszon for Union rights or for $15/hour pay and benefits? I'm not trying to say they are equal, just that its a spectrum.
For non Americans and non Chinese, Be it India or Russia or Iran, these two nations are just as offensive in different manners and it's just a matter of perspective
Would not be painless for China though. The thing about trade is, it’s trade. While Apple and American consumers benefit, so does China or obviously they wouldn’t trade. They’re not making our phones as a charity to us.
https://en.wikipedia.org/wiki/List_of_countries_by_military_...
I may strongly dislike China, but a relative lack of military spending is one of their strengths.
So sensible diversification is in distant future than many imagine.
[0] https://www.apple.com/newsroom/2019/09/apples-new-mac-pro-to...
Apple doesn't publish units-sold figures, but Iphone revenue is 5x that of Macs [0].
The Mac Pro is the least popular Mac. Again, I don't have number breakdowns, but Apple did say in the most recent keynote that launched the M2 Macbook Air that the Macbook Air, and the 13" Macbook Pro are their 2 most popular models.
So it's safe to say the Mac Pro represents an extreme fraction of Apple manufacturing.
[0] https://sixcolors.com/post/2022/07/apple-announces-83b-fisca...
