Apple makes plans to move production out of China

  1. 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).

  2. 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.

  3. 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.

  4. 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.

  5. 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.

  6. South America is right there and we can partner with the continent basically as a whole to make up for easing off China

  7. 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.

  8. 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.

  9. 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

  10. 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.

  11. 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.

  12. 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.

  13. 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.

  14. 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.

  15. 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.

  16. 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.

  17. 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.

  18. 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.

  19. it’s india our salaries are 1/10th of the Chinese english speaking population and heavy subsidy to manufacturers.

  20. 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.

  21. Manufacturing moved to China for the cheap wages. That's why just about everything started being made in China, from component to finished product.

  22. 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.

  23. 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%

  24. 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.

  25. 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.

  26. 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

  27. 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.

  28. 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.

  29. Tim Cook says he “ain’t got no time for your human rights. Time to move on to bigger and cheaper labor market!”

  30. 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.

  31. 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.

  32. Translation: China is getting expensive and we want to keep our crazy high profit margins so we're moving production out of China

  33. 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.

  34. They've been looking to diversify for 3-4 years. They've already identified much they can change and how.

  35. The next apple factory will be in North Korea. No silly “human rights” and having to “pay people for their work” to worry about.

  36. 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".

  37. Manufacture them themselves? Like, Tim Cook and the other board members can just start soldering phones on the company conference table?

  38. 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)

  39. 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.

  40. 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?

  41. 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.

  42. Yeh, from China,China has softened its covid policies due to protests, hope they open its borders march next year

  43. 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.

  44. 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..

  45. 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.

  46. 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.

  47. 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

  48. 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.

  49. puts. china keeps their profits higher than anywhere else. When? i have no idea i doubt they will move production, its just talk.

  50. 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.

  51. 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

  52. 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.

  53. 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.

  54. 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."

  55. 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.

  56. Not a fucking chance they move out of China . It’s by far the best business decision since it’s all about the margin.

  57. 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.

  58. 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.

  59. 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.

  60. its too late for TimApple. Apple invested a lot of money in China over years. Apple also made a lot of money from China.

  61. How uplifting! Tim, what’s the next country fortunate enough to be converted to Apple slave labor camps?

Leave a Reply

Your email address will not be published. Required fields are marked *

Author: admin