I've done work in China for years, primarily in manufacturing and anti-countefeiting. Which, as you might imagine, are somewhat related (think factory leaks).
Globalization was the wind under their wings, they sort of have to remove the wind if they ever plan to make good on their CCP goals by 2050. At the same time, they have a mountain of problems they’re facing domestically. If the CCP was smart and not so authoritarian, they’d further open up to keep China from succumbing to the oncoming stagnation in population and business.
There is a lot of reasons. China's economy isn't doing so good, and with their zero-covid policy its better to just move production out of the country where production can continue without government interference.
This was inevitable but nobody wants the truth when the money is rolling in they just want more profits. That's why the just in time supply chain was running so tight.
iirc, manufacturing costs in china has been going up as standard of living has improved. south america has been trying to position itself as the new cheap manufacturing hub.
I’m surprised it didn’t happen one way or another 15 years ago for geopolitical reasons. But I guess Apple doesn’t have any incentive to make less profit on an iPhone to deprive our primary rival of income. With the new chip ban i imagine there’s additional efforts/incentives to get key business to divest from China. If the situation there is naturally pushing our companies away, then so much the better.
They are nationalizing more than ever, China pulling out and Russia being forcefully isolated by much of the worlds economy. It's gonna be a rough one in the coming years if it keeps up.
I was taking a seminar in a UK university last week. My Chinese student openly criticised xi/CCP/zero covid in front of 25 other Chinese students, and talked about the suicides/deaths the policy had caused. I was bloody shocked - a few years prior this never would have happened. Point is, I wouldn't be surprised if there's some sort of turnaround in power, either that or an incredibly brutal crackdown.
Meh, this will last like 10 minutes. The CCP will say sorry make a whole bunch of concessions and suckers will come rushing back. Movie has the same ending every time.
My wet dream is a manufacturing renaissance in the US. I’m so sick of China made brands and everything right down to shoes (looking at you Nike) having problematic production elements morally speaking.
To get one suitable supplier in china we had to have five and non stop pit them against each other. If we took our foot off them for even a month quality would slip and we'd get threads outside tolerance and castings full of holes. We were constantly having to move production between them as it happened, making it clear if they wanted the business back we expected improvements.
Yes they basically already did this to Every Australian company to try to get the Aus govt to stop calling out their bad behaviour. Caused a lot of pain for Aus exporters but most found other markets so it backfired and I would go as far as saying it embarrassed them, they flexed muscle and the smaller guy escaped damage. Sun Tzu back at cha.
Finally. The US and other countries just turn a blind eye to China's human rights violations, oh and they are also committing genocide right now...by the way.
lol they are moving because Chinese workers are demanding better wages and China is demanding more regulation. Fuck Apple and all of these parasitic corporations.
Yup. Just as the Chinese people are getting gradually increasing salaries, more and more workers rights and successfully protesting to be treated like normal human beings, Apple is like "NOPE" and looks to other underdeveloped countries.
As someone whose huge international company made stuff in both countries, India has gigantic supply chain quality control problems. China does one thing horribly right, which is whip their drones into not making many mistakes. India from top to bottom has management issues that mess stuff up constantly.
China has lost it's cheapness now that they have made the world's largest middle-class under manufacturing. Going to cheaper countries like India will be bullish for the companies pulling out and for the Indian economy long term. China's economy would be crushed if lots of large tech companies move production out of China. They shot themselves in the foot with all of these purposeful lockdowns to purposely inflate their products.
Salaries are actually not that bigger differentiator. An analyst worked out even if they moved production back to the USA it would only impact RRP by 15%
There is an interesting video in the popular "Economics Explained" in which the economist presents this case: that China won't wither but will stall due to structural issues in the economy and government and that India is the real sleeper and future powerhouse to watch due to language, political structure, education, and so on.
The working condition in China that produce cheap iphones will not be duplicate in anywhere else. Not even in India or Africa. It basically work the people to death and change then like parts. And no riot or protest or strike will happen to disrupt productions for even one day.
Apple spends more than Toyota and Ford combined in yearly R&D and can't figure out how to automate making a simple fucking phone without exploiting third world wages and environmental regulations in a corrupt nation.
I read an article (either from the WSJ or NYT, their logo fonts are way too similar) mentioning that an analyst at Apple determined that there wasn't another country in the world that could supply the manufacturing efficiency of China. I wonder if that has changed or if Apple is ready to take a production hit.
Can’t wait for that Apple event when they talk about how it’s important to invest in low income diverse countries. And have a cinematic video leaving the audience with a tear in their eye.
They can’t afford the continued production interruptions and the ripple effect in the supply chain. This is the last holiday season Apple and shareholders will tolerate this crap. Predictable cash flow is more important than short term profitability. iPhone’s have no real substitute so I doubt they care about marginal wage increases (if Chinese wages have even increased along with the West): they’ll pass along the marginal cost to consumers and they would likely pay it. Apple is making a strategic move to produce in a more trade friendly country with less political risk. Wouldn’t doubt if they setup shop in multiple sites.
Umm no. You could have your plant taken over on a whim. See what happened in Venezuela with the oil companies being taken over. No silly "factory taken over".
It would be really cool to see them make the move to more domestic manufacturing. But they'll probably just bolster their remaining facilities in cheap labor countries (Mexico, India, Vietnam, etc)
They tried to make the Apple Mac Pro in the US. Even with the massive margin on that, it just doesn’t work out in terms of numbers. They’re just still doing tests.
The CHIPS bill passing might be a big part of this. They already produce a bit stateside, but might be part of the incentive they needed to leave China?
The other option is that Xi can give them a new opportunity because imagine the tax money what is going to flow away if they leave. Big companies are always cherry on top for taxes.
They always knew this was an eventuality, a cheap workforce can only be exploited so long.. as China became the world hub of manufacturing the local standard of living has grown and grown.. you’ve seen the transition of textiles move away and pharmaceuticals as well.. more and more industries will leave for the next impoverished nation to take advantage of..
The thing is that apple will be forced to manufacture in India if they want to sell in India . Have you seen tariffs on imported iPhones in India ? While Vietnam may have some advantage what it doesn't have is 1.4 Billion people and a rapidly growing middle class . If just the Indian middle class were a country it would be the third largest country by population with 430 million people.
I'm going to guess that if Apple actually moved production out of China, they'd eventually be banned from selling their products in the Chinese market.
More like puts, investors use their dollars to vote for profitability not morality. Just look at the wallstreet China shills still parroting their 'okay guys hear me out zero covid is actually good' bullocks.
The problem is that for the US, the moment any country begins to catch up and starts to challenge America's number 1 spot, they become a hostile country. Happened to Japan in the 1980s, happening to China right now, will happen to India or whatever country that comes next.
All manufacturing is moving to India. My company is shutting down the plant in Wuhan and moving it to India. Salaries for everybody including skilled workers are rock bottom, my company just hired a network engineer who lives in India for the equivalent of around $20,000 USD a year. China has rapidly industrialized and are going through their own industrial revolution right now in both an economical and cultural sense where workers are starting to demand better working conditions in higher wages. India will probably do the same in the next few decades and then manufacturing will probably move to Cambodia or something like that.
I can see the Apple ad now that they're leaving China. "Here at Apple we value hard work and honest pay, so we're committed to moving to (X country) where we can continue to put our employees and our customers first."
I doubt they can find the enormous amount of labor and resources required to pull this off anytime soon. While it's great to have a backup this will take years.
Why does this headline constantly keep getting posted on reddit. Apple has been trickling some production out of China for years. They arent gonna pull it all out anytime soon (or ever most likely). This is just pr propaganda for apple.
Yea. But realize that out of China does not automatically mean back to the United States.
https://en.wikipedia.org/wiki/Triffin_dilemma
Of course it's not the US, people don't want to pay three thousand dollars for an iPhone
It might if they fully attempt to automate their production line.
I've done work in China for years, primarily in manufacturing and anti-countefeiting. Which, as you might imagine, are somewhat related (think factory leaks).
I've talked to a few companies who were looking to move anywhere else too.
I once listened to a podcast that described in the most succinct way:
Globalization was the wind under their wings, they sort of have to remove the wind if they ever plan to make good on their CCP goals by 2050. At the same time, they have a mountain of problems they’re facing domestically. If the CCP was smart and not so authoritarian, they’d further open up to keep China from succumbing to the oncoming stagnation in population and business.
Cisco better get on board
We're building plants in Thailand instead of China now. (Chemical)
There is a lot of reasons. China's economy isn't doing so good, and with their zero-covid policy its better to just move production out of the country where production can continue without government interference.
This was inevitable but nobody wants the truth when the money is rolling in they just want more profits. That's why the just in time supply chain was running so tight.
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Lol trust in West Taiwan.
iirc, manufacturing costs in china has been going up as standard of living has improved. south america has been trying to position itself as the new cheap manufacturing hub.
South America is right there and we can partner with the continent basically as a whole to make up for easing off China
I’m surprised it didn’t happen one way or another 15 years ago for geopolitical reasons. But I guess Apple doesn’t have any incentive to make less profit on an iPhone to deprive our primary rival of income. With the new chip ban i imagine there’s additional efforts/incentives to get key business to divest from China. If the situation there is naturally pushing our companies away, then so much the better.
They are nationalizing more than ever, China pulling out and Russia being forcefully isolated by much of the worlds economy. It's gonna be a rough one in the coming years if it keeps up.
Even if there is a maximum 20% drop in China presence for the sake of diversification - that's an earth shattering amount of evaporated GDP
I was taking a seminar in a UK university last week. My Chinese student openly criticised xi/CCP/zero covid in front of 25 other Chinese students, and talked about the suicides/deaths the policy had caused. I was bloody shocked - a few years prior this never would have happened. Point is, I wouldn't be surprised if there's some sort of turnaround in power, either that or an incredibly brutal crackdown.
I'm just laughing at these China shills
Wouldn't look too much into it, answer is always that there is someone willing to do it cheaper, good boy points are a bonus.
Meh, this will last like 10 minutes. The CCP will say sorry make a whole bunch of concessions and suckers will come rushing back. Movie has the same ending every time.
Which places are they going? India? Thailand? Vietnam?
It almost seems like the arch Russia took from opening up to roaring back to dictatorship too.
My wet dream is a manufacturing renaissance in the US. I’m so sick of China made brands and everything right down to shoes (looking at you Nike) having problematic production elements morally speaking.
To get one suitable supplier in china we had to have five and non stop pit them against each other. If we took our foot off them for even a month quality would slip and we'd get threads outside tolerance and castings full of holes. We were constantly having to move production between them as it happened, making it clear if they wanted the business back we expected improvements.
Yes they basically already did this to Every Australian company to try to get the Aus govt to stop calling out their bad behaviour. Caused a lot of pain for Aus exporters but most found other markets so it backfired and I would go as far as saying it embarrassed them, they flexed muscle and the smaller guy escaped damage. Sun Tzu back at cha.
Finally. The US and other countries just turn a blind eye to China's human rights violations, oh and they are also committing genocide right now...by the way.
But the socioeconomic ways of the inbred population may not be able to comprehend what’s going on ???
lol they are moving because Chinese workers are demanding better wages and China is demanding more regulation. Fuck Apple and all of these parasitic corporations.
Yeah let's be straight, this is a business decision not a humanity decision.
Won't stop them from painting this as some activist bullshit tbh
Ethics and humanity will never get you anywhere. Embrace deceit and greed.
Yup. Just as the Chinese people are getting gradually increasing salaries, more and more workers rights and successfully protesting to be treated like normal human beings, Apple is like "NOPE" and looks to other underdeveloped countries.
Yes, China is no longer business friendly
Business is human regard
What do you think businesses do? Humanity decisions? 😂
It's just a nice coincidence that the right decision is also the economic best decision
Tim Apple
it’s india our salaries are 1/10th of the Chinese english speaking population and heavy subsidy to manufacturers.
Seems like the industrial boom that China got is happening to India just 10 years removed or so.
When industries grow, salaries starts to improve. Happened in IT industry
As someone whose huge international company made stuff in both countries, India has gigantic supply chain quality control problems. China does one thing horribly right, which is whip their drones into not making many mistakes. India from top to bottom has management issues that mess stuff up constantly.
Manufacturing moved to China for the cheap wages. That's why just about everything started being made in China, from component to finished product.
India doesn't seem to have the same consistent precision as China. The work I get from my team there is sloppy as hell.
Didn't they burn down a Foxconn factory recently because of unpaid wages?
This would be disastrous and I want to see it happen so I can laugh.
China has lost it's cheapness now that they have made the world's largest middle-class under manufacturing. Going to cheaper countries like India will be bullish for the companies pulling out and for the Indian economy long term. China's economy would be crushed if lots of large tech companies move production out of China. They shot themselves in the foot with all of these purposeful lockdowns to purposely inflate their products.
Salaries are actually not that bigger differentiator. An analyst worked out even if they moved production back to the USA it would only impact RRP by 15%
There is an interesting video in the popular "Economics Explained" in which the economist presents this case: that China won't wither but will stall due to structural issues in the economy and government and that India is the real sleeper and future powerhouse to watch due to language, political structure, education, and so on.
This just blows my mind. How shitty is the Indian government? a nuclear state.
But indian gov cannot force people to work as slaves. And if shit happens, and people protest, they cannot be subdue quickly by tanks and soldiers.
They'll move production to the Chinese factories in Africa
I hear India
Where are you drawing that data point from?
I don’t honestly think African culture can do sweatshops like the Chinese- I fucking hope not anyway.
This is the real answer. Idk if they are up and running there yet. But Africa is the next labor pool that will be exploited
Which country? There are very few places with the necessary infrasteucture for such a high value added tech product.
Foxconn is actually a Taiwanese company with factories in China.
My guess is Bangladesh or india. Lol. They act like they're doing something good when they're just moving from one sweat shop to another
The working condition in China that produce cheap iphones will not be duplicate in anywhere else. Not even in India or Africa. It basically work the people to death and change then like parts. And no riot or protest or strike will happen to disrupt productions for even one day.
Apple spends more than Toyota and Ford combined in yearly R&D and can't figure out how to automate making a simple fucking phone without exploiting third world wages and environmental regulations in a corrupt nation.
Tim Cook says he “ain’t got no time for your human rights. Time to move on to bigger and cheaper labor market!”
India? Vietnam? Where are the options for them with necessary infrastructure?
So do you mean Tim Apple?
China has human rights? Since when?
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I read an article (either from the WSJ or NYT, their logo fonts are way too similar) mentioning that an analyst at Apple determined that there wasn't another country in the world that could supply the manufacturing efficiency of China. I wonder if that has changed or if Apple is ready to take a production hit.
Can’t wait for that Apple event when they talk about how it’s important to invest in low income diverse countries. And have a cinematic video leaving the audience with a tear in their eye.
Oh and one more thing. We have removed the screens from our iPhones. Be brave.
Translation: China is getting expensive and we want to keep our crazy high profit margins so we're moving production out of China
They can’t afford the continued production interruptions and the ripple effect in the supply chain. This is the last holiday season Apple and shareholders will tolerate this crap. Predictable cash flow is more important than short term profitability. iPhone’s have no real substitute so I doubt they care about marginal wage increases (if Chinese wages have even increased along with the West): they’ll pass along the marginal cost to consumers and they would likely pay it. Apple is making a strategic move to produce in a more trade friendly country with less political risk. Wouldn’t doubt if they setup shop in multiple sites.
It’s not getting expensive, it’s the product risks with CCP being reckless and hostile toward any economic challenges to their power
It’ll take years, and massive investment. Puts.
I was gonna reply and then I read your bio headline
They've been looking to diversify for 3-4 years. They've already identified much they can change and how.
Good thing they have all the money in the world at their disposal.
Moving to Vietnam
Ah yes, 2500$ iPhone
Vietnam, about to spend mad cash buying up Dongs. Tell everyone that asks how can I afford a Lamborghini, I’ll tell them “Dong”
Upvoted for Dong!
I remember pho at a roadside stand was like 20,000 dongs
The next apple factory will be in North Korea. No silly “human rights” and having to “pay people for their work” to worry about.
Along with the world cup
😈😈😈
Doesnt seem that absurd, everything to maximize profits I guess
Umm no. You could have your plant taken over on a whim. See what happened in Venezuela with the oil companies being taken over. No silly "factory taken over".
Is Apple taking their Foxconn suicide nets with them???
List of Foxconn customers:
Vietnam!
Bad for short term bullish for long term
Mexico. When we clear out the cartel. Drastic efforts started at the same time as covid.
They have? I thought the current president was a cartel apologist.
Seems like the logical next step would be for apple to manufacture their own phones. They have the cash
The cheap workforce is the problem.
Manufacture them themselves? Like, Tim Cook and the other board members can just start soldering phones on the company conference table?
Yeah but why would they spend it on a very high cost low reward avenue like a giant plant?
Yeah but your $1200 iPhone would then be $1500
It would be really cool to see them make the move to more domestic manufacturing. But they'll probably just bolster their remaining facilities in cheap labor countries (Mexico, India, Vietnam, etc)
I'd be happy if they strengthened the labor market at our southern border
They tried to make the Apple Mac Pro in the US. Even with the massive margin on that, it just doesn’t work out in terms of numbers. They’re just still doing tests.
The CHIPS bill passing might be a big part of this. They already produce a bit stateside, but might be part of the incentive they needed to leave China?
Can you blame them? Covid 19 lockdowns making apple lose to much money.
I think they are also afraid of china attacking Taiwan
Will they be taking the suicide nets with them?
What the fuck is happening to this sub? This comment section is a shitshow
no one is moving any factories you fucking idiot.
The other option is that Xi can give them a new opportunity because imagine the tax money what is going to flow away if they leave. Big companies are always cherry on top for taxes.
So…you are holding some calls eh
Yeh, from China,China has softened its covid policies due to protests, hope they open its borders march next year
Dumb take, Apple and other mega corps see the writing on the wall. China is going to go through some social and political turmoil. Bad for business.
Do not use offensive language.
They always knew this was an eventuality, a cheap workforce can only be exploited so long.. as China became the world hub of manufacturing the local standard of living has grown and grown.. you’ve seen the transition of textiles move away and pharmaceuticals as well.. more and more industries will leave for the next impoverished nation to take advantage of..
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The thing is that apple will be forced to manufacture in India if they want to sell in India . Have you seen tariffs on imported iPhones in India ? While Vietnam may have some advantage what it doesn't have is 1.4 Billion people and a rapidly growing middle class . If just the Indian middle class were a country it would be the third largest country by population with 430 million people.
Maybe Mauritania so they can continue taking advantage of slave labor?
Revenue will have to go down a lot. Salaries to employees for the same job outside China = 5x
That doesn’t affect revenue, it affects profit margin
Good riddance. China is gonna lose all US companies because of xi
I wish that were true
Buffett got bagged
Maybe they should have kept the Foxconn plants in the US….
I hear Russia has a surplus of factory workers since March or so...
They’ve already moved a bunch of iPhone production to India.
India as entered the chat
It’s gonna be India
India
I'm going to guess that if Apple actually moved production out of China, they'd eventually be banned from selling their products in the Chinese market.
Who else is old enough to remember this episode?
How do you guys think this will affect the stock? I’m guessing it’ll drop for a bit while they transfer to a new place then pick back up
Apple products are about to cost a whole lot more.
The inevitable happening. Apple dug this for themselves, where will they locate? India, Vietnam?
Apple is moving production out of China. This is a good thing for the long term. But it will take years and massive investment. Puts.
Which Mexican city will production move to??
and what about the person who bought 1,32B$ of AAPL stocks lol ?
India is already revolting against apple contractors that make their phones
They can probably get their devoted turd squad to work for free. It's a cult anyway
Calls on AAPL? Is so, what and when?
puts. china keeps their profits higher than anywhere else. When? i have no idea i doubt they will move production, its just talk.
More like puts, investors use their dollars to vote for profitability not morality. Just look at the wallstreet China shills still parroting their 'okay guys hear me out zero covid is actually good' bullocks.
Taiwann
Hopefully usa. Need to end dependency on hostile countries (Russia, India and China are part of the same cabal). 1.3m layoffs at foxconn if so
The problem is that for the US, the moment any country begins to catch up and starts to challenge America's number 1 spot, they become a hostile country. Happened to Japan in the 1980s, happening to China right now, will happen to India or whatever country that comes next.
Cool cool incoming India
What is funny is they'll probably move to some African factory. Which is owned by China
No high tech products factories there.
All manufacturing is moving to India. My company is shutting down the plant in Wuhan and moving it to India. Salaries for everybody including skilled workers are rock bottom, my company just hired a network engineer who lives in India for the equivalent of around $20,000 USD a year. China has rapidly industrialized and are going through their own industrial revolution right now in both an economical and cultural sense where workers are starting to demand better working conditions in higher wages. India will probably do the same in the next few decades and then manufacturing will probably move to Cambodia or something like that.
Well done ✅✅✅✅
I can see the Apple ad now that they're leaving China. "Here at Apple we value hard work and honest pay, so we're committed to moving to (X country) where we can continue to put our employees and our customers first."
Yes short term for about 6-18 months will hurt apple. Long term will benefit apple so much more than just being only in china.
I heard Qatar has plenty of disposable workers….. I have no faith Apple will handle this properly
Man I want to invest in Huawei right now.
Good luck.
More diverse supply chain means higher costs unless they move to an even lower wage location
There are many southeast Asian nations that will happily accept Apple's borderline slave labor.
Not a fucking chance they move out of China . It’s by far the best business decision since it’s all about the margin.
In other news, Apple searches global resources for new slave labor force.
India & Vietnam benefit. US possibly? Apple as an investment is safe long term. Not many other safer (if any) long term places to park money.
what is your analysis based on?
So how does an individual profit from this 🤔
I doubt they can find the enormous amount of labor and resources required to pull this off anytime soon. While it's great to have a backup this will take years.
Why does this headline constantly keep getting posted on reddit. Apple has been trickling some production out of China for years. They arent gonna pull it all out anytime soon (or ever most likely). This is just pr propaganda for apple.
Now they signed CHIPS act. Also geopolitics is way more complex?
Who cares it will take at least 5 years
Calls on apple
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Taiwan is too risky.
And into the Phillpines or Vietnam.
Thinking with Nike its a bit different. After all there is little tech in their product compared to Aapl
they've been saying this for about 5 years now
This time it comes after CHIPS act was signed.
What will xicp do with the factories left behind?
🧢🧢🧢🧢🧢🧢🧢
Where is thou next sweat shop
Finally
West Africa would be the best logical location
Can we have a poll of what 3rd world country he’s gonna choose next
Florida
its too late for TimApple. Apple invested a lot of money in China over years. Apple also made a lot of money from China.
What are the sweatshops in china being too costly now?
How uplifting! Tim, what’s the next country fortunate enough to be converted to Apple slave labor camps?
Looks like they learned their lesson
IRELAND!!!!