Did Tim Cook sell Apple's soul to China?

From Patrick McGee and Ryan McMorrow's "Apple’s bargain with Beijing: Access to China’s factories — and consumers" ($) posted Tuesday in the Financial Times:

The most profitable tech company operating in China is not a homegrown internet giant such as Alibaba or Tencent, but California-based Apple...

It is the result of corporate diplomacy led by chief executive Tim Cook, whose regular visits to Beijing in pre-pandemic times, including meetings with Xi and Chinese tech executives, have helped avoid the fate of other western tech companies. The likes of Alphabet, Meta and Netflix have been locked out of the country.

Critics argue Apple’s reliance on Chinese manufacturing has made it acquiesce too readily to authoritarian demands. The bargain has helped ensure the group maintains unfettered access to the country’s cost-effective labour force and factories, while becoming a leading luxury brand in the world’s biggest consumer market.

“It’s clear to Beijing that it’s a two-way street. They get a lot of good back — a lot of employment out of it, and prestige,” said Brian Merchant, author of The One Device: The Secret History of the iPhone. “The pay, the standards are better for companies contracting with Apple. It’s helped boost wages towards the middle-class.”

My take: In the U.S., we think of Apple as a great American success story. Beijing may be forgiven for seeing Apple as a great Chinese success story.

17 Comments

  1. Alan Trerise said:
    And Foxconn is Taiwanese. An example of mutually assured success.

    5
    November 8, 2022
  2. Fred Stein said:
    Ugh. This FT and the earlier NYT article are just click-bait. Stuff we all know and what the others don’t know or even care to know:

    First: Everybody loves globalization. Nearly every large US company relies heavily on foreign countries for supply. Apple is really a small part.

    Second: Apple’s problems are temporary and not nearly as impactful as what happened to the automotive industry.

    Third: Apple has made good progress in India, again for supply chain and market acquisition.

    7
    November 8, 2022
    • David Emery said:
      And forth: Apple has had significant impacts in China with its social/business agenda.

      4
      November 8, 2022
  3. Tommo_UK said:
    I’d written a long response but to keep it simple, every chance TC created to lessen dependency on China he either borked, or did a Kowtow. What was a core Apple strategy is now as tangible as the Apple Car.

    0
    November 8, 2022
  4. John Konopka said:
    In one of the videos PED posted today they mentioned that Chinese workers are being offered about $4 an hour as an incentive to come back to work. That is closing in on minimum wage in the US. Apple could probably start assembling some product in the US without too much of an increase in cost. Especially now that so much of the assembly is automated.

    1
    November 8, 2022
    • Gregg Thurman said:
      $4 is not $30, IF you could find the number of qualified employees needed for such an assembly plant.

      With a current National unemployment rate of ~4%, name just one community in the US that has 250,000 technically qualified people to man such a facility.

      4
      November 8, 2022
      • Brian Loftus said:
        No one makes minimum wage. Not even in Texas. Highway convenience store offers starting $15-17 with benefits and managers making $20 plus in rural areas.

        0
        November 9, 2022
    • Lalit Jagtap said:
      Late Steve Job a learned from his mistake after opening a PC factory in Fremont CA. It was too ahead of its time. Next comes Mr Cook and demonstrated to the world how a global supply chain can be established outside USA. Today it’s China and now it’s growing in India but I am sure the Apple teams design iteration will eventually make it possible to assemble the devices anywhere including . Yesterday my junior highschool boy showed us the credit card wallet designed and produced using 3D printer. His wallet is good enough to hold the Apple Card. I am rooting for Industry 4.0 manufacturing to be all around the globe including in . The work will be done wherever we have skill manpower to justify the cost of production.

      5
      November 8, 2022
      • Lalit Jagtap said:
        including USA. The USA emoji was dropped.

        1
        November 8, 2022
  5. The argument becomes: Is it better to initiate trade or to boycott the world’s largest consumer market? It’s a testimony to the functionality of the iPhone, as a tool so important authoritarian regimes tolerate it despite how convenient it is for organizing opposition (see Iran protests). Stories like these only make the reporter look jealous of Tim Cook’s outstanding leadership skills.
    There are detestable things to note about every nation on earth. The United States is far and above the largest vendor of weapons, hardly makes US a purveyor of peace. We are grappling with many of the same issues as China: widespread surveillance using facial recognition (US provides that software), labor unrest, falling GDP, ongoing pandemic impacts, potential for nation-closing massive protests, and even a not so covert coup attempt. China shelters North Korea against opponents, US shelters (you fill in the nation) against its often hostile neighbors while that nation oppresses neighbors, including using a thinly veiled nuclear threat.
    Had my eyes examined today and ordered new bifocals to go with the new shoulder, I’m determined not to be myopic in 2023.

    4
    November 8, 2022
  6. Gregg Thurman said:
    I have just two comments for media critics (the hypocrites).

    #1 would you give up 70% of your pay in order to compete with the 65% of the world that doesn’t make USA wages? Or,

    #2 would you pay 15% – 20% more for Apple products to have then made in the USA?

    Assuming you are an Apple product user (highly likely) that makes just as guilty as you argue Tim Cook is. After all, you made a choice to buy an Apple product when you could have bought Samsung, Dell, HP or Xiaomi. Oh wait their products are made in the same shops Apple’s products are, for the same reasons. But those manufacturers don’t insist (contractually) on fair treatment of employees or the environment. In your own perverted way you are just as guilty as Apple’s competitors. You criticize Apple for doing what it’s competition won’t, then criticize Apple for making the same logistics decisions it’s competition does, in pursuit of the same thing all business do what they do: profit. Where is your firm on fair treatment/pay for women and minorities in the US, how does it dispose of its waste, what has it done to reduce its carbon footprint?

    There’s a reason I don’t subscribe to your publications. Your job is to inform and educate. You do neither, instead you have chosen to incite using fake news.

    6
    November 8, 2022
  7. Bart Yee said:
    IPhone in Canada quotes numbers from the FT article – regarding Apple, on the strength of $74.2B in China revenue, “According to data from S&P Global Market Intelligence, Apple racked up operating profits of a whopping $31.2 billion in China during its fiscal 2022. Meanwhile, China’s largest domestic tech companies, Tencent and Alibaba, trailed behind with $15.2 billion and $13.5 billion, respectively, in operating profits for their most recent 12-month periods.”

    “Today, Apple has much of the $600-and-above market to itself,” said Archie Zhang, an analyst at Counterpoint Research. “If you’re going to buy a $1,000 smartphone, there’s nothing else.”

    3
    November 9, 2022

Leave a Reply