This is an urgent issue, given the rising geopolitical tension between the United States and China and the fact that Apple remains the most valuable technology company in the world.
Since 2001, China has been the most important location for Apple to manufacture its devices, from iPods in 2000 to iPhones today.
About 95% of Apple products, including iPhones, AirPods, Macs, and iPads, are made in China. Although Apple has moved some manufacturing to India, experts believe that these developments will happen gradually.
Isaiah Research, a Taiwan-based supply chain consultancy, told Business Insider that the tech giant will continue to make up to 83% of iPhones in China and only 23% or less in India.
Currently, no Asian country can match China’s manufacturing capacity.
There are also other reasons for trust.
Taiwan-based Foxconn, arguably Apple’s largest supplier, is China’s largest private employer. Apple has about one million employees and supports another 4 million jobs across the manufacturing and technology ecosystem, according to the company’s Chinese website. And recently, Apple entrusted the assembly of the upcoming Vision Pro mixed reality glasses to a Chinese manufacturer.
All of this is very uncomfortable for Apple. Its hardware dependence on China weakens its defense mechanisms against, for example, Beijing’s whims over software censorship, a geopolitical battlefield that has been largely ignored.
Despite its initial protests, Apple has implemented new rules in China that require new apps to get approval from the government before they can appear on the Chinese App Store. In other words, the Chinese government has the direct power to reject Apple apps, although it is not yet clear if any apps are affected. (Google’s Play Store is not available in China.) Equivalent power for the United States government—especially Spain—seems inconceivable.
“The real effect of this approval process is that it highlights the growing tension between China and the West,” Gene Munster, managing partner of Deepwater Asset Management and a veteran Apple analyst, wrote in X.
Jay Newman, a former hedge fund manager at Elliott Management, recently noted that “even small changes carry the risk of retaliation from China’s bosses, who may retaliate by turning consumers away.” in China against Apple products.””.
And that is something that has already happened.
While Apple’s new iPhone 15 is making waves in China, the Mate 60 Pro—a new 5G smartphone launched in August by Chinese tech giant Huawei—is being championed as a symbol of growing freedom in China from the West. And several media outlets are reporting that China has banned iPhones for government officials, causing its stock price to plummet.
Apple CEO Tim Cook likes to present the company’s decades-long relationship with China as a cause for celebration.
At the China Development Forum in Beijing in March, he said, “It’s a symbiotic relationship.”
It is not clear that China sees it that way.