Apple CEO Tim Cook overseen the deep investment of his company in China. It was an extremely successful Apple strategy, but now it’s a real problem, says Patrick McGee.VCG/VCG via Getty Images
Donald Trump wants Apple to make an iPhone in America.
There is no chance that this will happen, says Patrick McGee, a journalist who has just published a book about Apple’s deep relationship with China.
McGee also states that the end of the Apple due to the short Chinese tariffs, saying that some iPhone and other products are manufactured in India and Vietname-misleading.
Donald Trump says the iPhone needs to be built in the US, or they will face a 25% rate.
But no matter what Trump says: The iPhone will never be built in the US.
Patrick McGee, a journalist who has just released Apple in China, says this: capturing the world’s largest companies, “he looked at all the money and efforts that Apple spent in decades to establish himself in China.
The Financial Times Apple, which has covered McGee, explains why it was extremely useful in Apple-notes it has created an ecosystem that allows it to make extremely sophisticated devices on a huge scale. But he claims it was even more Useful to China – because Apple has provided Chinese engineers access to valuable technology that allows them to create another High value supply chains.
And that McGee says he has also created a problem for Apple CEO Tim Cook, as he can no longer extract a Chinese-Chinese-US-based company now using American knowledge to compete with American companies.
(I asked Apple whether she wants to consider McGee’s book. Through a representative, the company said “statements in the book are not true” and “fill in inaccuracies” and that McGee did not really trust the book with Apple.)
I talked to McGee because of my recent podcast episode of my channels. In the edited passage below, we are talking about why he thinks that Apple is impossible to transfer iPhone to USA. And why McGee thinks Apple says she is moving a certain production to India and Vietnam to avoid some US rates in China is very misleading.
Peter Kafka: Trump’s administration says she wants Apple to transfer all its production to the United States. You and all who know something about Apple say it’s just impossible when it comes to iPhone. Why?
Patrick McGee: We lack so many things. Population density is one. Many people know the factory city [in China] It is possible that 500,000 people just put up the iPhone. People that people do not understand is that they do not do that year. They do this for three or four months.
And then they move on to the next project. So Apple does not cost costs. It uses Foxconn as a production as a service.
Last month, an analyst quoted, who said it would be as in Boston, every person dropped what he was doing and just worked on the iPhone. And as it is quoted, it underestimates the challenge. Because he would like the city of Boston to be transported to another location, such as Milwaukee, gathering for an iPhone for a few weeks and then moving on to some other project.
China has this floating population – it is literally called – and the workforce alone is larger than all American labor. So we will never match them due to the density of population and, especially the dynamism, density of the population.
Not to mention that this is happening in smaller jobs. Not to mention that these are better machines and automation. It is not a question of will and costs – it seems to be a Maga dream. It goes beyond this.
We often say that Americans do not want to do these jobs. Chinese I do not want to do these jobs. However, there are so many people who would rather do it than working in the fields 14 hours a day. We just don’t have a job base that would do it.
One of the other arguments you and others make is that China has people, but there is also a huge infrastructure: the whole series of plants and subcontractors and subcontractors, all of which are designed to buy the necessary products at a drop hat.
Yes. Without the time it takes to create a new factory in China, we will still do environmental documents.
But in The latest call of Apple’s earningsThe company said that at least the next quarter of the iPhone they sell in the US would leave India, and most of the other electronics they sell in the US – Airpods and more. – will leave Vietnam.
So what am I missing here? It makes you look like an apple have to Went forward and found out how to remove this material from China.
Not at all. Think about it: if there are a thousand steps to create an iPhone, and the final is now in India, you avoid tariffs. The final assembly is considered to be “produced in India”.
How if I took every step to bake a cake except that icing or …
Put it in a box or the like.
Honestly, there is little in India. This may change in the next five to 10 years, but the idea that actual production is taking place in India is simply wrong.
If you buy an iPhone next year, it will say “made in India”. I think it’s almost certainty. But that phone will be no less dependent on the China -oriented supply chain than any other iPhone you’ve ever purchased.
As a result of this earnings, Apple also said that existing rates would cost them $ 900 million in the next quarter. It may look like a large number, but Apple earns $ 100 billion a year, so no. If it was only the only effect of tariffs, it seems quite solved by the Apple problem: they have to move the final assembly to India and eat certain costs, but they can do it.
Yes, absolutely.
I think everything is much more gloomy, that the political ties that Apple maintain with China are not broken. I shouldn’t say political relationships – I really mean business relationships. They will not leave China soon.
However, the technological transfer, created by the most modern products every year and developing them in China, is by nature that causes technology to move from America to China at crazy level. And if you think about China as a threat, if you think they are America’s greatest opponent, crazy, the world’s largest company provides China with this technological knowledge.
Wall Street Journal He has just reported that Apple is thinking of some of these additional costs to the next phase of the iPhone, which they start selling this fall, transmitting these costs to the consumer. Does it sound right for you?
Yes, because another alternative is that you squeeze more from your suppliers. Some analysts have suggested this, and it is a kind of funny. Because if there is something to squeeze out of the supply chain, you are damn better you know that Apple has already done it. Apple pays very thin margins to its suppliers. There are no bunch of fat cats they can just squeeze
