Apple CEO Tim Cook was watching his company’s deep investment in China. It was an extremely successful strategy for Apple – but now it’s a real problem, author Patrick McGi argues.VCG/VCG via Getty Images
Donald Trump wants Apple to make an iPhone in America.
There is no chance that this happens, says Patrick McGi, a journalist who just publishes a book about Apple’s deep ties with China.
McGee also claims that the Apple ending of the Trump-stating tariffs for China, saying that some iPhone and other products are made in India and Vietnam-e misleading.
Donald Trump says the iPhone should be built in the US or will collide with a 25% tariff.
But it doesn’t matter what Trump says: The iPhone will never be built in the US.
This is according to Patrick McGi, a journalist who has just published Apple in China: The Kepture of the World in the biggest company in the world -a detailed look at all the money and effort that Apple has spent for decades to join China.
McGi, who covered Apple for the Financial Times, explains why this is extremely useful for Apple-because it created an ecosystem that allows it to make ultra-sophisticated devices on a huge scale. But he claims it was even More Useful for China – because Apple gave Chinese engineers access to valuable technology that allowed them to build other High value delivery chains.
And that McGee Posits, has created both a problem for Apple CEO Tim Cook-because he can no longer practically extract the company from China-and for the United States-because his opponent now uses an American know-how to compete with US companies.
(I asked Apple if I wanted to weigh McGi’s book. Through a representative, the company said “the allegations in the book are false” and “filled with inaccuracies” and that McGie did not check the book with Apple.)
I talked to McGi about a recent episode of my podcast on my channels. In the edited excerpt below, we talk about why he thinks it is impossible Apple to move the iPhone production to the United States. And why McGi thinks Apple says this is moving to India and Vietnam to escape some US tariffs for China is deeply misleading.
Peter Kafka: The Trump Administration says it wants Apple to move all its production to the United States. You and anyone who knows something about Apple says it’s not literally possible when it comes to an iPhone. Why?
Patrick McGi: There are so many things missing. The population density is one. Many people know a factory city [in China] There may be 500,000 people who just assemble the iPhone. The thing that people do not understand is that they do not do this circle all year long. Do this for three or four months.
And then they move to another project. So Apple doesn’t bring costs. Uses Foxconn’s likes to do production as a service.
There is a cited analyst last month, who said it would be if in the city of Boston every person released what he did and simply works on the iPhone. And as cotable, that is, it underestimates the challenge. Because he would like the city of Boston to be transported to some other place, like Milwaukee, assembled the iPhone for a few weeks and then switch to some other project.
China has this floating population – this is literally called – and only this labor force is greater than all the workforce in America. So we will never compare them with regard to the density of the population and more special the dynamics of the population.
Let alone that this happens at a lower labor rates. Is it to be much better machines and automation. It’s not about willpower and expenses – it seems to be what the Mag’s dream is based on. That goes beyond this.
We often say that Americans do not want to do these jobs. Thehe Chinese I don’t want to do these jobs. But there are so many people who would prefer to do this than to work on the fields for 14 hours a day. We just don’t have a work base that would do this.
One of the other arguments that you and others do is that China has people, but there are just a huge infrastructure: a whole series of plants and plants and subcontractors that are all embedded in getting Apple products they need for a drop of hat.
Yes. At the time it will take China to build a new factory, we will still do the documents in the environment.
But in The most recent Apple profit callThe company said that at least for the next quarter, every iPhone they sell in the US will leave India, and most of the other electronics that sell in the US – AirPods, etc. – They will come out of Vietnam.
So what do I miss here? This makes it like an Apple have I went ahead and I came up with how to move these things from China.
Not at all. Think about it this way: if there are a thousand steps in creating an iPhone and the ultimate is already in India, you avoid tariffs. The final meeting is considered “making it in India”.
Like if I have taken every step of baking the cake, except for placing the cherry or …
Putting it in the box or something.
Honestly, in India it doesn’t happen much. This may change over the next five to 10 years, but the idea that actual production is happening in India is just wrong.
If you buy the iPhone next year, he will say “done in India”. I think it’s almost value. But this phone will be no less dependent on the supply chain oriented to China than any other iPhone you’ve ever bought.
In this call for profit, Apple also said that existing tariffs would cost them $ 900 million over the next quarter. This may sound like a big number, but Apple earns a $ 100 billion profit a year, so it’s not. If it was just the only impact on tariffs, it seems like a rather solvable problem for Apple: they have to move the final meeting in India and eat some expenses, but they could do it.
Yes, absolutely.
Where I think things are much better, the political relationships Apple has with China are unbreakable. I should not say political connections – I really mean business connections. They will not leave China soon.
However, the technological transfer, which is created by designing avant -garde products every year and builds them in China, is inherently the transfer of technology from America to China to a crazy level. And if you think of China as a threat, if you think of them as the largest opponent in America, it is crazy that the world’s largest company is equipping China with this technological year of know-how during the year.
Thehe Wall Street Journal They just reported that Apple was thinking of perhaps dealing with some of these additional costs for the next round of iPhone, which start selling this fall – transmitting these costs to the user. Does that sound right to you?
Yes, because the other alternative is that you get more out of your suppliers. Some analysts have guessed this, and it’s somehow funny. Because if there is something to get out of the supply chain, you know better better that Apple has already done it. Apple pays very thin margins to its suppliers. Outside there are no bunch of thick cats that they can just squeeze
