11 ms·

The end of Apple’s affair with China

127 points by carlycue 4y ago

carlycue 4y ago
https://web.archive.org/web/20221024221753/https://www.economist.com/business/2022/10/24/the-end-of-apples-affair-with-china https://web.archive.org/web/20221024221753/https://www.econo...
- hmcamp 4y ago
  Thanks
- deleted 4y ago
  [deleted]
  - deleted 4y ago
    [deleted]
chmaynard 4y ago
- glerk 4y ago
  https://youtu.be/IeTybKL1pM4 https://youtu.be/IeTybKL1pM4
- xattt 4y ago
  You wouldn’t download a magazine article!
- deleted 4y ago
  [deleted]
- moreira 4y ago
  I suppose all copies of all pages are theft, if you choose to look at it that way. Me saving a .html file locally, Google caching their search results, archive.org saving copies of pages. The internet is built around this, and we've all collectively decided that it's OK. But to your point, their robots.txt does allow this kind of access, so this argument is moot - they explicitly allow bots like archive.org's to crawl & index these pages' content.
- bzax 4y ago
  https://www.merriam-webster.com/dictionary/theft https://www.merriam-webster.com/dictionary/theft: "the felonious taking and removing of personal property with intent to deprive the rightful owner of it" Has the rightful owner been deprived of their property? What, exactly, is the property in question?
  - Bakary 4y ago
    I pirate quite a bit but what bothers me about this reasoning is that at the end of the day the goal is to not pay for other people's labor, and the reason it happens is primarily the ease of achieving this rather than the nature of the thing in question. Whether it's specifically called theft or not has significant legal implications, but is also a moot point in an ethical and aesthetic sense.
    - LegitShady 4y ago
      If it doesn't matterz use the right words.
      - Bakary 4y ago
        It's not that the definitions don't matter, just that they aren't invoked in good faith for the most part, or don't take into account the broader situation of stuff needing effort to come into existence.
    - Akronymus 4y ago
      In the words of Gabe Newell: "We think there is a fundamental misconception about piracy. Piracy is almost always a service problem and not a pricing problem," he said. "If a pirate offers a product anywhere in the world, 24 x 7, purchasable from the convenience of your personal computer, and the legal provider says the product is region-locked, will come to your country 3 months after the US release, and can only be purchased at a brick and mortar store, then the pirate's service is more valuable." I personally find going to an archival site to be MUCH easier than signing up for a subscription. Also, most news outlets don't provide a way to do one time donations, so I can't throw money their way if I read some amount of articles. So, no, for me it isn't the goal to not pay, but rather to have it be convenient.
- hedora 4y ago
  It must be an authorized copy, given how the way back machine works. Also, the copy at economist.com has a non-compliant cookie popup in front of it. Also, as the sibling points out, copying isn't theft.
- yrgulation 4y ago
  Some people lack financial understanding. They think companies can provide free content, without ads, and unbiased, endlessly, then they wonder why there is so much click bait, misinformation and low quality content.
- kennend3 4y ago
  lets drop this "copying is theft" nonsense. I dont get why companies distort words to their advantage and private citizens accept this, then do as you and post about "theft". I'm Canadian so lets look at my governments definition: https://laws-lois.justice.gc.ca/eng/acts/c-46/section-322.html https://laws-lois.justice.gc.ca/eng/acts/c-46/section-322.ht... Theft 322 (1) Every one commits theft who fraudulently and without colour of right takes, or fraudulently and without colour of right converts to his use or to the use of another person, anything, whether animate or inanimate, with intent (a) to deprive, temporarily or absolutely, the owner of it, or a person who has a special property or interest in it, of the thing or of his property or interest in it; (b) to pledge it or deposit it as security; (c) to part with it under a condition with respect to its return that the person who parts with it may be unable to perform; or (d) to deal with it in such a manner that it cannot be restored in the condition in which it was at the time it was taken or converted. Can you outline what has been "Stolen" using the above law?
deleted 4y ago
[deleted]
runnerup 4y ago
Less “affair” and more “long term partnership”. They both grew and developed a lot from it.
- deleted 4y ago
  [deleted]
pcurve 4y ago
Very insightful. It corrected a lot of incorrect information I had on this issues. 1. Labor cost is an issue but at 530 per month as of 2020 Chinese mfr labor is still relatively cheap and only twice as expensive as India. 2. Sales in China peaked in 2015-6 in terms of percentage of revenue for Apple 3. Despite the move, analysts predict 80% of Apple products will still be made in China by 2025.
- rapsey 4y ago
  > 1. Labor cost is an issue but at 530 per month as of 2020 Chinese mfr labor is still relatively cheap and only twice as expensive as India. Only by US standards. You can pay that much for a factory worker in eastern/south Europe. The US is a huge outlier regarding salaries compared to practically anywhere else.
  - rocgf 4y ago
    > The US is a huge outlier regarding salaries compared to practically anywhere else. That is obviously not true, unless you exclude a lot of countries from "anywhere else".
    - rapsey 4y ago
      Ok name the countries.
      - jamesdgb 4y ago
        All the countries in the EU: https://en.wikipedia.org/wiki/List_of_European_Union_member_states_by_minimum_wage https://en.wikipedia.org/wiki/List_of_European_Union_member_...
        sgjohnson 4y ago
        This is completely factually wrong.
        4y ago
newaccount2021 4y ago
gjsman-1000 4y ago
To me, I think that Apple's reliance on China, and Taiwan, was and is an extremely risky and misguided decision. Imagine if Apple had developed a total reliance on chip factories built in, say, Ukraine, back in 2018. That's about where we are now with Taiwan and China, I believe. It's sure been profitable - but at, I would argue, obscene risk. A few years of TSMC being unavailable would have Apple on life support. Apple would actually be worse off than many companies and the ditching Intel decision would do a total 180 into a massive mistake. Nobody cares if you have higher-performance products if you can't make them. Edit: For those saying that can't happen, think Ukraine in 2012 or 2018. Russia? Invading? Can't happen. For Taiwan, China, invading? Can't happen.
- rapsey 4y ago
  There was no alternative at the time regarding overall production. China gave them the option to be extremely flexible and efficient. Other countries like India/Vietnam is copying the Chinese cookbook. Ony TSMC is capable of producing the most performant chips.
  - gjsman-1000 4y ago
    > There was no alternative at the time regarding overall production. China gave them the option to be extremely flexible and efficient. Other countries like India/Vietnam is copying the Chinese cookbook. Yes, and no. Apple has done manufacturing in America before, a long time ago (remember the Apple II?). Also with the $200B in cash they had, they could probably build every factory down to the screw factory they needed. Also worth remembering is that iPhone bodies don't change very much (iPhone SE is like, a decade of a design and still going). $200B would buy at least 5 or more latest-gen chip plants, easily, or at least give TSMC all the capital they needed. If I was Tim Cook, I would have absolutely looked into segmentation. American manufacturing for American customers, Chinese manufacturing for European/Asian customers, Indian manufacturing for Indian customers.
    - rapsey 4y ago
      > Also with the $200B in cash they had When exactly are you talking about? > $200B would buy at least 5 or more latest-gen chip plants, easily, or at least give TSMC all the capital they needed. $200B and a decade. Also do you think Taiwan is just going to let go of their biggest bargaining chip for a measly $200B? > If I was Tim Cook, I would have absolutely looked into segmentation. American manufacturing for American customers, Chinese manufacturing for European/Asian customers, Indian manufacturing for Indian customers. I mean they are doing this as per the article.
waynecochran 4y ago
How was Apple able to maintain its production of iPhones in China during the height of Covid-19 in China?
- qikInNdOutReply 4y ago
  There is the truth, as in the party wants zero covid. And there is the truth. The party wants to earn money, no matter what. So work is allowed, and ignored, just dont tell Xi and some excessive Covid measures are driven into some unimportant areas for show. The ilusion of a strong state, the same as russias military ..
  - andsoitis 4y ago
    If you had massive outbreaks at a factory like Foxconn’s largest in Zhengzhou which employs 300,000 people, you would have massive interruptions to production. Instead, they do extensive testing and quarantining to prevent outbreaks at a factory like that. So no, it isn’t “performative zero COVID”.
    - immibis 4y ago
      Why can't our own politicians figure that out?
    - waynecochran 4y ago
      It would be interesting to speak with a Foxconn employees from that time...
    - qikInNdOutReply 4y ago
      Most of the workers who work at these factorys are young and fit, and they life and eat on site. So as so often in china, local tax inspector in company inspects shipment, local covid expert certifies zero covid. Every once and a while a higher up arrives. Before that happens, the workers are checked for covid, some are quarantined and the rest is for a few weeks actually covid free. After the visit nobody cares..
- 4y ago
makeitdouble 4y ago
I tried looking around to get how much of the iPhones are actually made in India and couldn’t find any clear information. Apple seems to be relying on Foxconn’s Indian subsidiary, and it is described as an assembly partner, so I’d expect all the parts and chips to be coming from neighboring countries (so mostly China?) It is still a pretty big deal, but my assumption would be that aside from the trumpeting headlines, Apple and Foxconn are still deeply depending on China at this point and will stay so for many years to come ?
- joezydeco 4y ago
  You're talking about turning a ship 10000x the size of the Titanic. A company like Apple with a CEO that built his career on logistics and production? You can be sure there's a plan. You just aren't allowed to see it.
  - traceroute66 4y ago
    > A company like Apple with a CEO that built his career on logistics and production? You can be sure there's a plan. You just aren't allowed to see it. This, this and THIS ! Do not underestimate Apple when it comes to supply chain management, they are the kings. Don't believe me ? Look at the COVID-induced semi-conductor shortage. Every other manufacturer out there that relies on a very strict definition of Just-In-Time supply chain has had issues with stupid-long lead times. Meanwhile Apple ? Most of their product range has remained on next-day delivery throughout, and custom-build stuff has only been delayed by a few weeks rather than the months and years seen at other manufacturers. Apple work much much closer with their supply chain than the majority of other manufacturers out there.
    - nvrspyx 4y ago
      It took almost 3 months for me to get my MBP this year. Ordered in mid-March, wasn't delivered until early June.
    - alexpotato 4y ago
      Can you recommend any sources to learn more about this?
shubhamjain 4y ago
The cynical side of me senses that what would land with India and Vietnam is labor-intensive, commoditized assembly of parts. "X% of iPhones manufactured in India" is sort of misleading if the bulk of parts are still coming from China. In some ways, I think this is going China's way. They are moving up the ladder into specialized manufacturing and away from manual labor. A smart strategy considering the demographic decline they are to face in upcoming decades. On the other hand though, it would be foolish to expect the whole industry moving away from another country overnight. It would be a slow process that would start from the labor intensive parts of manufacturing. I think, it'd be a win-win for everyone, including China.
- bmer 4y ago
  Yeah, this makes sense to me. I have not read the linked article, but I wonder, does it discuss this? I caught another comment lower down that says the article mentions that labour costs in India are "only 2x" less than the labour cost in China. As if "only 2x" is "trivial"...
  - throwawaymaths 4y ago
    There is momentum due to large capital costs associated with building the facility and getting the hardware to perform the manufacturing over there in the first place, etc. When labor costs are low, capex can be a bigger piece of the pie and a larger contributor to the effect
  - quesera 4y ago
    2x a small number is sometimes also a small number. I speculate that labor is not a significant contributor the cost to produce an iPhone.
    - MagnumOpus 4y ago
      More precisely, assembly labour is not a significant contributor. There's labour in other parts of the chain that make up a big chunk of the cost - hardware design, software design, firmware, chip design, fabbinig, component manufacture, shipping, retail, warranty repair and whatnot, but those don't happen in China or India, so they won't change if the assembly location changes.
dontbenebby 4y ago
This isn't news -- Apple opened factories in a bunch of SE Asian countries IIRC, and now stands poised to play them off each other since the old model of showing up and being shocked there are human rights abuses in... not just Xinjiang. Apple's real affair, along with the rest of the tech industry, is with countries like Ireland and Austria are "neutral" in the sense that they allowed untaxed gains to flow into them much like Switzerland did in WWII. They need to adjust to a world where people may buy their devices every two, three, even five years and hold onto them -- especially since China has control of those rapidly depleting rare earth mineral deposits that you need for the overly thin batteries. Or folks can switch to Android, who seemed to have gone full Pirates of Silicon Valley and stolen the good features from iOS, last I poked around someone's phone. (Let's be real: at this point they're just doing tweaks, not coming up with major enhancements.)
- gambiting 4y ago
  >>who seemed to have gone full Pirates of Silicon Valley and stolen the good features from iOS .......I'm sorry, what? It seems like iOS is "stealing" features from Android every few years, they basically let Samsung and others implement something first, improve it for a couple iterations, then finally they add it to iOS and say "look this is a massive step for iOS!", and I'm sitting there being like......we've had this for at least 5 years, what's the big deal? Just that it's nice and polished? Cool, well done, have a cookie.
  - dontbenebby 4y ago
    >.......I'm sorry, what? It seems like iOS is "stealing" features from Android every few years, they basically let Samsung and others implement something first, improve it for a couple iterations, then finally they add it to iOS and say "look this is a massive step for iOS!" Who knows -- there may have been a time where one was superior and the other inferior but slowly pilfering features, but for right now moving from iOS to Android is like an American considering emigration... (Where you gonna go... Montreal? If I rolled my eyes any harder, my retinas would literally detach.)
  - Apocryphon 4y ago
imwillofficial 4y ago
- UltraViolence 4y ago
  The tragedy is that they've made themselves too reliant on China and can't really turn their back on them. Their fates are permanently intertwined. If China goes down, so does Apple.
yalogin 4y ago
The thing with outsourcing is, the vendor will themselves set up shop wherever the customer wants. In this case all the chinese companies are simply setting up plants in India and Vietnam, so they end up not losing any business in the short term. Same thing happens with software. All of the India consulting firms set up shop all over the world, for example Mexico to provide similar time zones to their US customers yet reduce costs. The customer gets to say we are not relying on country X and the vendor still has that contract.
- bergenty 4y ago
  It makes a difference though. The Indian factories hire all Indian staff and this makes it resilient to any trade war issues that may arise between China and the U.S.
  - checkyoursudo 4y ago
    Secondary sanctions may hit the Chinese-owned Indian companies, which could make them no more resilient at all. No? It seems like doesn't matter so much who is employed there as much as who owns them.
  - biztos 4y ago
    I realize the US-India tech relationship is very resilient, but don’t Indian companies run the same risk in principle by staffing the contract shops in Country X with Indians?
    - Terretta 4y ago
      This is one problem with the BRICS narrative.
UltraViolence 4y ago
This is all part of the "Great Decoupling" that will happen in the next decade. Apple will be hurt by this, no doubt, since it will not be able to find suitable replacement suppliers for some of its components, and it's loath to buy from Samsung, its biggest rival. Ergo, Apple may go down when push comes to shove and the U.S. government gets into a tangle with China.
ksec 4y ago
>Chinese companies’ share of iPhone electronics production will rise from 7% this year to 24% by 2025, I have been repeating this for years [1] [2] but every time gets downvoted into oblivion on HN. Not only that, there are no signs of Apple turning ship either. Those that were forced out by Geopolitics doesn't count. But yes, doing assembly in India gets their PR win. At least, judging from the 141 comments so far. There are a few people finally getting it. Edit: And my quick glance of Economists data suggest they simply classify company by their HQ location. But not by their ownership and shareholding structure. Not that it makes substantial differences, just the numbers are higher than what is shown. [1] https://news.ycombinator.com/item?id=29489132 https://news.ycombinator.com/item?id=29489132 [2] Wrote about YMTC on SemiWiki in 2018. And their relationship with Apple.
- pasabagi 4y ago
  As I understand it, assembly is also the most manual part of the process, so presumably the wage differential between China and India favours the move regardless.
xony 4y ago

127 points by carlycue 4y ago

https://web.archive.org/web/20221024221753/https://www.economist.com/business/2022/10/24/the-end-of-apples-affair-with-china https://web.archive.org/web/20221024221753/https://www.econo...

hmcamp 4y ago
Thanks
deleted 4y ago
[deleted]
- deleted 4y ago
  [deleted]

chmaynard 4y ago

glerk 4y ago
https://youtu.be/IeTybKL1pM4 https://youtu.be/IeTybKL1pM4
xattt 4y ago
You wouldn’t download a magazine article!
deleted 4y ago
[deleted]
moreira 4y ago
I suppose all copies of all pages are theft, if you choose to look at it that way. Me saving a .html file locally, Google caching their search results, archive.org saving copies of pages. The internet is built around this, and we've all collectively decided that it's OK. But to your point, their robots.txt does allow this kind of access, so this argument is moot - they explicitly allow bots like archive.org's to crawl & index these pages' content.
bzax 4y ago
https://www.merriam-webster.com/dictionary/theft https://www.merriam-webster.com/dictionary/theft: "the felonious taking and removing of personal property with intent to deprive the rightful owner of it" Has the rightful owner been deprived of their property? What, exactly, is the property in question?
- Bakary 4y ago
  I pirate quite a bit but what bothers me about this reasoning is that at the end of the day the goal is to not pay for other people's labor, and the reason it happens is primarily the ease of achieving this rather than the nature of the thing in question. Whether it's specifically called theft or not has significant legal implications, but is also a moot point in an ethical and aesthetic sense.
  - LegitShady 4y ago
    If it doesn't matterz use the right words.
    - Bakary 4y ago
      It's not that the definitions don't matter, just that they aren't invoked in good faith for the most part, or don't take into account the broader situation of stuff needing effort to come into existence.
  - Akronymus 4y ago
    In the words of Gabe Newell: "We think there is a fundamental misconception about piracy. Piracy is almost always a service problem and not a pricing problem," he said. "If a pirate offers a product anywhere in the world, 24 x 7, purchasable from the convenience of your personal computer, and the legal provider says the product is region-locked, will come to your country 3 months after the US release, and can only be purchased at a brick and mortar store, then the pirate's service is more valuable." I personally find going to an archival site to be MUCH easier than signing up for a subscription. Also, most news outlets don't provide a way to do one time donations, so I can't throw money their way if I read some amount of articles. So, no, for me it isn't the goal to not pay, but rather to have it be convenient.
hedora 4y ago
It must be an authorized copy, given how the way back machine works. Also, the copy at economist.com has a non-compliant cookie popup in front of it. Also, as the sibling points out, copying isn't theft.
yrgulation 4y ago
Some people lack financial understanding. They think companies can provide free content, without ads, and unbiased, endlessly, then they wonder why there is so much click bait, misinformation and low quality content.
kennend3 4y ago
lets drop this "copying is theft" nonsense. I dont get why companies distort words to their advantage and private citizens accept this, then do as you and post about "theft". I'm Canadian so lets look at my governments definition: https://laws-lois.justice.gc.ca/eng/acts/c-46/section-322.html https://laws-lois.justice.gc.ca/eng/acts/c-46/section-322.ht... Theft 322 (1) Every one commits theft who fraudulently and without colour of right takes, or fraudulently and without colour of right converts to his use or to the use of another person, anything, whether animate or inanimate, with intent (a) to deprive, temporarily or absolutely, the owner of it, or a person who has a special property or interest in it, of the thing or of his property or interest in it; (b) to pledge it or deposit it as security; (c) to part with it under a condition with respect to its return that the person who parts with it may be unable to perform; or (d) to deal with it in such a manner that it cannot be restored in the condition in which it was at the time it was taken or converted. Can you outline what has been "Stolen" using the above law?

deleted 4y ago

[deleted]

runnerup 4y ago

Less “affair” and more “long term partnership”. They both grew and developed a lot from it.

deleted 4y ago
[deleted]

pcurve 4y ago

Very insightful. It corrected a lot of incorrect information I had on this issues. 1. Labor cost is an issue but at 530 per month as of 2020 Chinese mfr labor is still relatively cheap and only twice as expensive as India. 2. Sales in China peaked in 2015-6 in terms of percentage of revenue for Apple 3. Despite the move, analysts predict 80% of Apple products will still be made in China by 2025.

rapsey 4y ago
> 1. Labor cost is an issue but at 530 per month as of 2020 Chinese mfr labor is still relatively cheap and only twice as expensive as India. Only by US standards. You can pay that much for a factory worker in eastern/south Europe. The US is a huge outlier regarding salaries compared to practically anywhere else.
- rocgf 4y ago
  > The US is a huge outlier regarding salaries compared to practically anywhere else. That is obviously not true, unless you exclude a lot of countries from "anywhere else".
  - rapsey 4y ago
    Ok name the countries.
    - jamesdgb 4y ago
      All the countries in the EU: https://en.wikipedia.org/wiki/List_of_European_Union_member_states_by_minimum_wage https://en.wikipedia.org/wiki/List_of_European_Union_member_...
      - sgjohnson 4y ago
        This is completely factually wrong.
      - 4y ago

newaccount2021 4y ago

gjsman-1000 4y ago

To me, I think that Apple's reliance on China, and Taiwan, was and is an extremely risky and misguided decision. Imagine if Apple had developed a total reliance on chip factories built in, say, Ukraine, back in 2018. That's about where we are now with Taiwan and China, I believe. It's sure been profitable - but at, I would argue, obscene risk. A few years of TSMC being unavailable would have Apple on life support. Apple would actually be worse off than many companies and the ditching Intel decision would do a total 180 into a massive mistake. Nobody cares if you have higher-performance products if you can't make them. Edit: For those saying that can't happen, think Ukraine in 2012 or 2018. Russia? Invading? Can't happen. For Taiwan, China, invading? Can't happen.

rapsey 4y ago
There was no alternative at the time regarding overall production. China gave them the option to be extremely flexible and efficient. Other countries like India/Vietnam is copying the Chinese cookbook. Ony TSMC is capable of producing the most performant chips.
- gjsman-1000 4y ago
  > There was no alternative at the time regarding overall production. China gave them the option to be extremely flexible and efficient. Other countries like India/Vietnam is copying the Chinese cookbook. Yes, and no. Apple has done manufacturing in America before, a long time ago (remember the Apple II?). Also with the $200B in cash they had, they could probably build every factory down to the screw factory they needed. Also worth remembering is that iPhone bodies don't change very much (iPhone SE is like, a decade of a design and still going). $200B would buy at least 5 or more latest-gen chip plants, easily, or at least give TSMC all the capital they needed. If I was Tim Cook, I would have absolutely looked into segmentation. American manufacturing for American customers, Chinese manufacturing for European/Asian customers, Indian manufacturing for Indian customers.
  - rapsey 4y ago
    > Also with the $200B in cash they had When exactly are you talking about? > $200B would buy at least 5 or more latest-gen chip plants, easily, or at least give TSMC all the capital they needed. $200B and a decade. Also do you think Taiwan is just going to let go of their biggest bargaining chip for a measly $200B? > If I was Tim Cook, I would have absolutely looked into segmentation. American manufacturing for American customers, Chinese manufacturing for European/Asian customers, Indian manufacturing for Indian customers. I mean they are doing this as per the article.

waynecochran 4y ago

How was Apple able to maintain its production of iPhones in China during the height of Covid-19 in China?

qikInNdOutReply 4y ago
There is the truth, as in the party wants zero covid. And there is the truth. The party wants to earn money, no matter what. So work is allowed, and ignored, just dont tell Xi and some excessive Covid measures are driven into some unimportant areas for show. The ilusion of a strong state, the same as russias military ..
- andsoitis 4y ago
  If you had massive outbreaks at a factory like Foxconn’s largest in Zhengzhou which employs 300,000 people, you would have massive interruptions to production. Instead, they do extensive testing and quarantining to prevent outbreaks at a factory like that. So no, it isn’t “performative zero COVID”.
  - immibis 4y ago
    Why can't our own politicians figure that out?
  - waynecochran 4y ago
    It would be interesting to speak with a Foxconn employees from that time...
  - qikInNdOutReply 4y ago
    Most of the workers who work at these factorys are young and fit, and they life and eat on site. So as so often in china, local tax inspector in company inspects shipment, local covid expert certifies zero covid. Every once and a while a higher up arrives. Before that happens, the workers are checked for covid, some are quarantined and the rest is for a few weeks actually covid free. After the visit nobody cares..
4y ago

makeitdouble 4y ago

I tried looking around to get how much of the iPhones are actually made in India and couldn’t find any clear information. Apple seems to be relying on Foxconn’s Indian subsidiary, and it is described as an assembly partner, so I’d expect all the parts and chips to be coming from neighboring countries (so mostly China?) It is still a pretty big deal, but my assumption would be that aside from the trumpeting headlines, Apple and Foxconn are still deeply depending on China at this point and will stay so for many years to come ?

joezydeco 4y ago
You're talking about turning a ship 10000x the size of the Titanic. A company like Apple with a CEO that built his career on logistics and production? You can be sure there's a plan. You just aren't allowed to see it.
- traceroute66 4y ago
  > A company like Apple with a CEO that built his career on logistics and production? You can be sure there's a plan. You just aren't allowed to see it. This, this and THIS ! Do not underestimate Apple when it comes to supply chain management, they are the kings. Don't believe me ? Look at the COVID-induced semi-conductor shortage. Every other manufacturer out there that relies on a very strict definition of Just-In-Time supply chain has had issues with stupid-long lead times. Meanwhile Apple ? Most of their product range has remained on next-day delivery throughout, and custom-build stuff has only been delayed by a few weeks rather than the months and years seen at other manufacturers. Apple work much much closer with their supply chain than the majority of other manufacturers out there.
  - nvrspyx 4y ago
    It took almost 3 months for me to get my MBP this year. Ordered in mid-March, wasn't delivered until early June.
  - alexpotato 4y ago
    Can you recommend any sources to learn more about this?

shubhamjain 4y ago

The cynical side of me senses that what would land with India and Vietnam is labor-intensive, commoditized assembly of parts. "X% of iPhones manufactured in India" is sort of misleading if the bulk of parts are still coming from China. In some ways, I think this is going China's way. They are moving up the ladder into specialized manufacturing and away from manual labor. A smart strategy considering the demographic decline they are to face in upcoming decades. On the other hand though, it would be foolish to expect the whole industry moving away from another country overnight. It would be a slow process that would start from the labor intensive parts of manufacturing. I think, it'd be a win-win for everyone, including China.

bmer 4y ago
Yeah, this makes sense to me. I have not read the linked article, but I wonder, does it discuss this? I caught another comment lower down that says the article mentions that labour costs in India are "only 2x" less than the labour cost in China. As if "only 2x" is "trivial"...
- throwawaymaths 4y ago
  There is momentum due to large capital costs associated with building the facility and getting the hardware to perform the manufacturing over there in the first place, etc. When labor costs are low, capex can be a bigger piece of the pie and a larger contributor to the effect
- quesera 4y ago
  2x a small number is sometimes also a small number. I speculate that labor is not a significant contributor the cost to produce an iPhone.
  - MagnumOpus 4y ago
    More precisely, assembly labour is not a significant contributor. There's labour in other parts of the chain that make up a big chunk of the cost - hardware design, software design, firmware, chip design, fabbinig, component manufacture, shipping, retail, warranty repair and whatnot, but those don't happen in China or India, so they won't change if the assembly location changes.

dontbenebby 4y ago

This isn't news -- Apple opened factories in a bunch of SE Asian countries IIRC, and now stands poised to play them off each other since the old model of showing up and being shocked there are human rights abuses in... not just Xinjiang. Apple's real affair, along with the rest of the tech industry, is with countries like Ireland and Austria are "neutral" in the sense that they allowed untaxed gains to flow into them much like Switzerland did in WWII. They need to adjust to a world where people may buy their devices every two, three, even five years and hold onto them -- especially since China has control of those rapidly depleting rare earth mineral deposits that you need for the overly thin batteries. Or folks can switch to Android, who seemed to have gone full Pirates of Silicon Valley and stolen the good features from iOS, last I poked around someone's phone. (Let's be real: at this point they're just doing tweaks, not coming up with major enhancements.)

gambiting 4y ago
>>who seemed to have gone full Pirates of Silicon Valley and stolen the good features from iOS .......I'm sorry, what? It seems like iOS is "stealing" features from Android every few years, they basically let Samsung and others implement something first, improve it for a couple iterations, then finally they add it to iOS and say "look this is a massive step for iOS!", and I'm sitting there being like......we've had this for at least 5 years, what's the big deal? Just that it's nice and polished? Cool, well done, have a cookie.
- dontbenebby 4y ago
  >.......I'm sorry, what? It seems like iOS is "stealing" features from Android every few years, they basically let Samsung and others implement something first, improve it for a couple iterations, then finally they add it to iOS and say "look this is a massive step for iOS!" Who knows -- there may have been a time where one was superior and the other inferior but slowly pilfering features, but for right now moving from iOS to Android is like an American considering emigration... (Where you gonna go... Montreal? If I rolled my eyes any harder, my retinas would literally detach.)
- Apocryphon 4y ago

imwillofficial 4y ago

UltraViolence 4y ago
The tragedy is that they've made themselves too reliant on China and can't really turn their back on them. Their fates are permanently intertwined. If China goes down, so does Apple.

yalogin 4y ago

The thing with outsourcing is, the vendor will themselves set up shop wherever the customer wants. In this case all the chinese companies are simply setting up plants in India and Vietnam, so they end up not losing any business in the short term. Same thing happens with software. All of the India consulting firms set up shop all over the world, for example Mexico to provide similar time zones to their US customers yet reduce costs. The customer gets to say we are not relying on country X and the vendor still has that contract.

bergenty 4y ago
It makes a difference though. The Indian factories hire all Indian staff and this makes it resilient to any trade war issues that may arise between China and the U.S.
- checkyoursudo 4y ago
  Secondary sanctions may hit the Chinese-owned Indian companies, which could make them no more resilient at all. No? It seems like doesn't matter so much who is employed there as much as who owns them.
- biztos 4y ago
  I realize the US-India tech relationship is very resilient, but don’t Indian companies run the same risk in principle by staffing the contract shops in Country X with Indians?
  - Terretta 4y ago
    This is one problem with the BRICS narrative.

UltraViolence 4y ago

This is all part of the "Great Decoupling" that will happen in the next decade. Apple will be hurt by this, no doubt, since it will not be able to find suitable replacement suppliers for some of its components, and it's loath to buy from Samsung, its biggest rival. Ergo, Apple may go down when push comes to shove and the U.S. government gets into a tangle with China.

ksec 4y ago

>Chinese companies’ share of iPhone electronics production will rise from 7% this year to 24% by 2025, I have been repeating this for years [1] [2] but every time gets downvoted into oblivion on HN. Not only that, there are no signs of Apple turning ship either. Those that were forced out by Geopolitics doesn't count. But yes, doing assembly in India gets their PR win. At least, judging from the 141 comments so far. There are a few people finally getting it. Edit: And my quick glance of Economists data suggest they simply classify company by their HQ location. But not by their ownership and shareholding structure. Not that it makes substantial differences, just the numbers are higher than what is shown. [1] https://news.ycombinator.com/item?id=29489132 https://news.ycombinator.com/item?id=29489132 [2] Wrote about YMTC on SemiWiki in 2018. And their relationship with Apple.

pasabagi 4y ago
As I understand it, assembly is also the most manual part of the process, so presumably the wage differential between China and India favours the move regardless.

xony 4y ago