From Yang Jie’s “Apple Looks to Boost Production Outside China” posted Saturday by the Wall Street Journal:
TOKYO: Apple has told some of its contract manufacturers that it wants to boost production outside China, citing Beijing’s strict anti-Covid policy among other reasons, people involved in the discussions said.
India and Vietnam, already sites for a small portion of Apple’s global production, are among the countries getting a closer look from the company as alternatives to China, the people said.
More than 90% of Apple products such as iPhones, iPads and MacBook laptops are manufactured in China by outside contractors, according to analysts. Apple’s heavy dependence on the country is a potential risk because of Beijing’s authoritarian Communist government and its clashes with the U.S., analysts have said.
My take: Which contract manufactures has Apple been talking to? The Tokyo dateline could be a clue.
Apple doesn’t talk to the press about this kind of stuff. This is a leak from the supply chain. Does that make it clickbait? Your call.
My call is that anyone can claim a “leak from the supply chain”. And that the WSJ has been known to put a thumb on the scale in the past when it comes to Apple….
Point being, they manufacture and sell both inside and outside of China. And while China is communist and clearly has designs on growing its territory, they played ball with the rest of the world far more than Russia. Consequently, their economy is much more deeply engrained with the rest of the world, which means they have much more to lose than the Russian oligarchs if they let their isolationist, expansionist-minded cadre take too much control.
Putin has cast his die with maximum authoritarianism, and is literally losing ground as a result. China’s leadership will either understand this and react accordingly or will see their country go the same path. In a way, Apple’s massive capitalist venture with China is actually helping China’s leadership figure out which side it’s citizen’s bread is actually buttered on. Yes, it’s possible that the alternative progressive vision will still be rejected in favor of Russia’s approach. But if that happens, then we’re going to have a lot bigger problems than just this present market meltdown – which was inevitable in any case due to massive overvaluation of the market in general, and is better happening now than at some later date when the collapse would have been even more damaging.
While I have an optimistic perspective toward the role India can play in the manufacturing and assembling of Apple products, I am skeptical of India’s burdensome regulatory environment and stifling regulatory oversight. Vietnam is more consistent with China’s capitalistic instinct of reducing burdensome regulations for the purpose of facilitating production. I see Beijing’s authoritarian Communist government more as an asset for Apple similar to what Vietnam Communist government would be to the tech titan. Additionally, I also believe Vietnam is more competitive than India. What worries me at night is all the regulatory oversight agencies in India and how they can make work for Apple so burdensome.
Candidly, Apple may diversify its manufacturing more to other geographic regions outside China, but to believe that Apple is going to reduce its presence in China to any significant degree is erroneous thinking. Apple knows where its biscuits are buttered and China also offers superb jams and jellies to go with that premium quality butter.