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This might be the most damaging of all announcements made thus far. Companies have known they probably have relied a little bit too much on 'one country' thus

This might be the most damaging of all announcements made thus far. Companies have known they probably have relied a little bit too much on 'one country' thus far, and that there could be ramifications, and this 'mini trade war' is basically the red flag which caused them to 'do something'. Apple is a monster, representing alone a good chunk of the trade. But it isn't this specific move, it's the knock-on effects and the permanency of it the changes that will be the real damage. Apple is an industry leader, and this will cause everyone to think about their situation in the same way. Even if the 'trade war' ended today with happy smiles, companies will still look into this, because all of this could happen again, and it's probably the right thing to do anyhow in their eyes. Once a portion of manufacturing leaves, it's never coming back, and as other sources become more reliant and competitive and other companies see leaders planting their flags elsewhere, there will be follow-on and the genie will not be put back in the bottle. I think this year is a major change point for China and the world, as the 1990's were fast but quiet, the 2000's it came to everyone's attention, the 2010's concerns started to rise outside the border, jingoism, 'head of state for life' and enough critical mass of concerned voices lead by Mr. Big in the Presidency (rational acting or not, it's made a mark). Combined with a natural slowdown which would have occurred regardless. This is a new chapter.

DevKoala 7y ago
I don’t understand why you are getting downvoted. I strongly agree.
igravious 7y ago
> Apple is a monster, representing alone a good chunk of the trade. Country | Company | 1Q19 Vol | 1Q19 Share | 1Q18 Vol | 1Q18 Share | YoY Change –––––––––+–––––––––+––––––––––+––––––––––––+––––––––––+––––––––––––+––––––––––– 1. Korea | Samsung | 71.9m | 23.1% | 78.2m | 23.5% | -8.1% 2. China | Huawei | 59.1 | 19.0% | 39.3 | 11.8% | 50.3% 3. USA | Apple | 36.4 | 11.7% | 52.2 | 15.7% | -30.2% 4. China | Xiaomi | 25.0 | 8.0% | 27.8 | 8.4% | -10.2% 5. China | vivo | 23.2 | 7.5% | 18.7 | 5.6% | 24.0% 5. China | OPPO | 23.1 | 7.4% | 24.6 | 7.4% | -6.0% | Others | 72.1 | 23.2% | 91.9 | 27.6% | -21.5% Apple is 12% of the smartphone market and falling, they're no monster. They're huge by market cap but not by handset volume. I'm not denying that they're a significant player but let's keep things in perspective. If anything, Samsung is the monster. > Apple is an industry leader, and this will cause everyone to think about their situation in the same way. I don't think they are. Arguably Samsung is on the hardware front. Google is on the software front. > I think this year is a major change point for China and the world, as the 1990's were fast but quiet, the 2000's it came to everyone's attention, the 2010's concerns started to rise outside the border […] Combined with a natural slowdown which would have occurred regardless. Although the economy is slowing slightly most agree it is still growing in the 6% range. Given that most economists believe that China has more or less the largest economy in the world in PPP terms even taking into account that their regions definitely tend to over-inflate key numbers. We can see by metrics like electricity production and consumption that the economy is probably the largest in the world at least according to the CIA Factbook anyhow. https://www.cia.gov/library/publications/the-world-factbook/fields/252rank.html https://www.cia.gov/library/publications/the-world-factbook/... > This is a new chapter. I agree. People keep underestimating China. # Last year China built ~6,000kms of high-speed rail, actually increasing the rate of build out in the face of an economic trade war. To put that in perspective that's more kms than Spain has ever built and Spain has the second longest high-speed rail network on the planet. # Global patent applications leader starting from 1980 (a proxy for innovation) … 🇯🇵 Japan: (1980 – 2006) (26 Years) 🇺🇸 United States: (2006 – 2011) (5 Years) 🇨🇳 China: (2011 – Present) (8 Years) [Currently double the USA] # In 2013 China became the third country ever to soft-land on the moon. # “China is the world's leading country in electricity production from renewable energy sources, with over double the generation of the second-ranking country, the United States.” according to Wikipedia # Has the largest electric vehicle market in absolute terms and is on track to be 50% of the global market by 2025
- sonnyblarney 7y ago
  1) 'Unit sales' data is not super important next to sales, and especially profit. Some of those manufacturers make $1 per unit, whereas Apple may make $50 per unit in profit. Apple is 50% of smartphone wholesale revenues globally (and about $200B in sales for all products). Given that Apple's margins significantly better than other makers, their 'profit dominance' is even greater, they're likely well over 60% of global smartphone profits. That's huge. 2) All of that aside, Apple is a monster company globally. Everyone pays attention to what they do. This announcement alone will make a big wave in business, and others will follow their lead. The world's most admired company with major manufacturing in China - has just indicated 'they want to move 30% out' - this is a big deal. 3) "Although the (China) economy is slowing slightly most agree it is still growing in the 6% range." No, it's growing at 6% in the imaginary fabricated CPC range. Now, it's more likely a little over 3% in reality. [1] If you want to know how 'we' (outsiders) try to figure out how much China is actually growing, I recommend FT Podcast (Alphaville) on 'What China Wants' [2] basically, they go into forensic detail about how the financial industry tries to directly measure China growth, because nobody buys the CPC data. The only thing that "everyone agrees" (even China) is that their published numbers are made up. But it's moot: the era of 'mega growth' is gone, and China is slowing down, this nobody doubts, and this situation is going to be significant pressure on Xi outside of everything else. 4) Most people are generally aware that China is 'big' and does things on scale. They're building rail - super. They're landing on the moon - almost irrelevant. Patent Applications - good, but has to be contextualized for all sorts of things. But again -> it's besides the point: Apple is a massive company signalling a move away from China. Many others will follow. It doesn't matter what happens between Trump and Xi, this pattern is now established. The manufacturing that leaves is never coming back. America probably does not gain, but the rest of Asia probably will. China will keep on doing what China does, as you say. [1] https://www.forbes.com/sites/kenrapoza/2019/04/26/morningstar-chinas-growth-will-shrink-to-3-25/#6fe1a97e37cd https://www.forbes.com/sites/kenrapoza/2019/04/26/morningsta... [2] March 21 Financial Times 'Alphaville' Podcast 'What China Wants'
  - powerapple 7y ago
    1000 unit order is 1000 unit order, regardless Apple take 60% profit, or Samsung takes 20%. Factories work on orders, and they don't get to keep Apple's profit.

DevKoala 7y ago

I don’t understand why you are getting downvoted. I strongly agree.

igravious 7y ago

> Apple is a monster, representing alone a good chunk of the trade. Country | Company | 1Q19 Vol | 1Q19 Share | 1Q18 Vol | 1Q18 Share | YoY Change –––––––––+–––––––––+––––––––––+––––––––––––+––––––––––+––––––––––––+––––––––––– 1. Korea | Samsung | 71.9m | 23.1% | 78.2m | 23.5% | -8.1% 2. China | Huawei | 59.1 | 19.0% | 39.3 | 11.8% | 50.3% 3. USA | Apple | 36.4 | 11.7% | 52.2 | 15.7% | -30.2% 4. China | Xiaomi | 25.0 | 8.0% | 27.8 | 8.4% | -10.2% 5. China | vivo | 23.2 | 7.5% | 18.7 | 5.6% | 24.0% 5. China | OPPO | 23.1 | 7.4% | 24.6 | 7.4% | -6.0% | Others | 72.1 | 23.2% | 91.9 | 27.6% | -21.5% Apple is 12% of the smartphone market and falling, they're no monster. They're huge by market cap but not by handset volume. I'm not denying that they're a significant player but let's keep things in perspective. If anything, Samsung is the monster. > Apple is an industry leader, and this will cause everyone to think about their situation in the same way. I don't think they are. Arguably Samsung is on the hardware front. Google is on the software front. > I think this year is a major change point for China and the world, as the 1990's were fast but quiet, the 2000's it came to everyone's attention, the 2010's concerns started to rise outside the border […] Combined with a natural slowdown which would have occurred regardless. Although the economy is slowing slightly most agree it is still growing in the 6% range. Given that most economists believe that China has more or less the largest economy in the world in PPP terms even taking into account that their regions definitely tend to over-inflate key numbers. We can see by metrics like electricity production and consumption that the economy is probably the largest in the world at least according to the CIA Factbook anyhow. https://www.cia.gov/library/publications/the-world-factbook/fields/252rank.html https://www.cia.gov/library/publications/the-world-factbook/... > This is a new chapter. I agree. People keep underestimating China. # Last year China built ~6,000kms of high-speed rail, actually increasing the rate of build out in the face of an economic trade war. To put that in perspective that's more kms than Spain has ever built and Spain has the second longest high-speed rail network on the planet. # Global patent applications leader starting from 1980 (a proxy for innovation) … 🇯🇵 Japan: (1980 – 2006) (26 Years) 🇺🇸 United States: (2006 – 2011) (5 Years) 🇨🇳 China: (2011 – Present) (8 Years) [Currently double the USA] # In 2013 China became the third country ever to soft-land on the moon. # “China is the world's leading country in electricity production from renewable energy sources, with over double the generation of the second-ranking country, the United States.” according to Wikipedia # Has the largest electric vehicle market in absolute terms and is on track to be 50% of the global market by 2025

sonnyblarney 7y ago
1) 'Unit sales' data is not super important next to sales, and especially profit. Some of those manufacturers make $1 per unit, whereas Apple may make $50 per unit in profit. Apple is 50% of smartphone wholesale revenues globally (and about $200B in sales for all products). Given that Apple's margins significantly better than other makers, their 'profit dominance' is even greater, they're likely well over 60% of global smartphone profits. That's huge. 2) All of that aside, Apple is a monster company globally. Everyone pays attention to what they do. This announcement alone will make a big wave in business, and others will follow their lead. The world's most admired company with major manufacturing in China - has just indicated 'they want to move 30% out' - this is a big deal. 3) "Although the (China) economy is slowing slightly most agree it is still growing in the 6% range." No, it's growing at 6% in the imaginary fabricated CPC range. Now, it's more likely a little over 3% in reality. [1] If you want to know how 'we' (outsiders) try to figure out how much China is actually growing, I recommend FT Podcast (Alphaville) on 'What China Wants' [2] basically, they go into forensic detail about how the financial industry tries to directly measure China growth, because nobody buys the CPC data. The only thing that "everyone agrees" (even China) is that their published numbers are made up. But it's moot: the era of 'mega growth' is gone, and China is slowing down, this nobody doubts, and this situation is going to be significant pressure on Xi outside of everything else. 4) Most people are generally aware that China is 'big' and does things on scale. They're building rail - super. They're landing on the moon - almost irrelevant. Patent Applications - good, but has to be contextualized for all sorts of things. But again -> it's besides the point: Apple is a massive company signalling a move away from China. Many others will follow. It doesn't matter what happens between Trump and Xi, this pattern is now established. The manufacturing that leaves is never coming back. America probably does not gain, but the rest of Asia probably will. China will keep on doing what China does, as you say. [1] https://www.forbes.com/sites/kenrapoza/2019/04/26/morningstar-chinas-growth-will-shrink-to-3-25/#6fe1a97e37cd https://www.forbes.com/sites/kenrapoza/2019/04/26/morningsta... [2] March 21 Financial Times 'Alphaville' Podcast 'What China Wants'
- powerapple 7y ago
  1000 unit order is 1000 unit order, regardless Apple take 60% profit, or Samsung takes 20%. Factories work on orders, and they don't get to keep Apple's profit.