If I were Tim Cook I'd be real worried about being shut out of my own supply chain right about now.
Didn't Apple start ramping up iPhone production in India recently? I agree that China is likely to retaliate but I imagine whatever decision making process there was for approving this HK app involved plenty of lawyers and analysis of potential fallout.
Apple is also paying lip service to "manufacturing in the US" by manufacturing the low volume, high margin Mac Pros.
Not meant to be a value judgement, knowing how to placate politicians is necessary when you operate at scale.
My understanding is that the Indian built phones were destined for the EU market which isn't engaged in a trade war with India or China.
You're not wrong, but if people see that China is willing to shutdown someone as big as Apple, then they'll know that everyone else (who is probably smaller) stand no chance at all. People may start re-evaluating the (economic / supply-chain) risks they're will to take at that point.
In any case, threatening to shut Apple down wouldn’t be a message that you can’t do business in China, just that everybody, no matter how big, needs to toe the line. Do that, and you won’t have any problems.
And maybe you're fine with that today. But once you've ceded that ground, what happens when they move the line?
Because they always move the line.
- Mandatory state written malware for phones and computers,
- "AI" for tracking people in public, at schools and businesses
- Prevalent speed and crosswalk cameras to enforce traffic laws that their own police force fails to write tickets for.
It'd basically undermine the entire economic model that has led to China's rise out of poverty over the past 30-40 years.
And Apple is such a high profile company that it would likely cause an international incident.
That's an overstatement in my opinion. Can you provide an example where a high profile (tech) company caused an international incident?
Could be the case for companies with a national-security profile like energy or food industry, but the Chinese can live without iPhones and Apple, while feeling the bump, will move on.
If this extremely unlikely event happened the US government isn't going to ignore it.
As I recall, buying local brands instead was framed as patriotism.
The milestone being Note 7 explosion, they refused to offer the same refund package that they offered to the world outside China, and actually accusing some users microven the phone for fraud...
And it blows up. No one wants to be treat as idiots.
Why not already do it instead of taking the risk allowing Western companies undermining their state ideology? Does Apple transfer technology to them and they needed that?
I don’t see them easily recovering, in the PR sense after kicking Apple out. They are already in the defensive posture with HK protests, which they saw get out of hand. Concentration camps for Muslim minorities is a terrible PR disaster. If anything Apple is in a good position to squeeze more concessions and handouts out of them at this point. Even, say make a publicity stunt about opening a factory in Vietnam or moving it back to US.
The Chinese value stability, and that big of a dislocation would have a negative impact on their stability.
I’m sure they can pressure them, but extreme measures would be reserved for cases where a company has crossed a line that cannot be in-crossed.
The CCP isn't going to compromise on its core authoritarian and nationalist values over a piddling concern about the unemployment caused by one Western company leaving. Apple's not that important, and my guess is the problems caused by the trade war dwarf any effect Apple could cause.
Also, I doubt they like Apple much anyway, and they would probably welcome the disruption to Apple that it would experience during a pullout. Might create opportunities for Huawei or Oppo.
With that said, is that enough for China to care at all? a little? a lot? Meaning, I wouldn't be surprised if China would forgo plenty of jobs from Western companies as their economy matures. Especially if China fully boycotted Apple, I doubt many other US Companies would respond at all
Many of those companies are showing themselves to be spineless right now
Either way, 4.8 million people + friends/family, being angry is not a small number. China's population is ~1.3 billion according to CIA world fact book. So it's certainly less than 1% of the population, but not insignificant.
They'd seize the factories and continue production, at least for the medium term. It makes no sense economically, but it keeps Xi in power.
To Beijing, the factories are valuable for (a) IP and (b) jobs. Apple walking deprives China of (a), but not (b), not in the short term.
In the near-term, expropriation would stave off job losses. (In the cities, amidst highly-skilled workers no less.) In the medium term, production lines could be adapted to make non-bricked products.
Long story short, the threat of massive job losses to China is minimal--Apple has limited leverage over Beijing.
They wouldn't produce iPhones without the chips. They'd just keep running the lines. Apple has limited leverage in threatening to walk away from China.
Edit: according to Wiki, the US DoD is the largest employer in the world at 2.1M employees.https://en.m.wikipedia.org/wiki/List_of_largest_employers
First group doesn't really have a choice and the second group has no interest in an iPhone.
Have you ever thought that people might actually prefer it’s functionality?
These days I just keep quiet on the topic and organise my tech life to the best of mine and my family's convenience. And the Apple ecosystem is so far unbeaten in that regard.
I quite like the iPhone and I've considered switching on the basis that it seems to have a better security model.
Being able to use my phone like a USB stick/manage music and audio books and things is a huge point in Android's favour for example.
The shutdown of Samsung’s last China phone factory comes after it cut production at the plant in the southern city of Huizhou in June and suspended another factory late last year, underscoring stiff competition in the country.
The South Korean tech giant’s ceased phone production in China follows other manufacturers shifting production from China due to rising labor costs and the economic slowdown.