Don’t fall for the fear mongering, says Daniel Eran Dilger. Apple is less at risk from store closures and quarantines than Huawei, Oppo, Vivo or Xiaomi.
From “Why Apple’s supply chain is prepared for China’s coronavirus” posted Monday on AppleInsider:
As China scrambles to contain the outbreak of the highly infectious strain, media bloggers working to erect fear, uncertainty, and doubt about Apple’s prospects have sensationalized the greatest imaginable potential impacts on Apple. That naturally includes Apple’s product sales in China, where its brick and mortar retail stores have been closed for a few days following the Lunar New Year holiday period out of “an abundance of caution.”
Never mind that store closures—and full city shutdowns in some cases—aren’t unique to Apple. Apple has the fewest stores in China of any of the major handset manufacturers. Apple’s few dozen landmark retail stores in China exist to establish the company as a permanent, enduring brand capable of supplying customer service for its products well into the future.
Most rival domestic phone resellers in China operate vast numbers of kiosks designed to sell their cheap Androids largely via promotional pricing. The greatest impact of broad retail store closures will fall on brands such as Huawei, Oppo, Vivo, and Xiaomi, who all strive to make razor-thin margins on vast unit sales of commodity devices. Their businesses are contingent on massive sales volumes shipped out at minimal cost —and Apple’s are not…
Fear-mongers have also targeted the potential impacts that travel bans, quarantines, and business closures within China might have on Apple’s ability to build its products for global audiences, because much of its components and assembly are centered in China…
Apple has long been taking the lead in employee safety, worker rights, and environmental protections, a luxurious moral stance it can afford as a very profitable company. Yet its competitors in China have long had a poor reputation in safeguarding their employees or even monitoring factory safety. Which Android makers can afford to take elaborate steps to keep their factories and their workers safe and productive when they are already barely profitable at peak production?
My take: Gregg Thurman, this one’s for you.