Last year, 156 of 465 manufacturing sites used by Apple suppliers were in China – 33.6pc. This was down from 35.2pc and 36.4pc in 2022 and 2021 respectively, and 46pc five years earlier. The company is relying more heavily on supply chains in countries such as Vietnam, Taiwan and South Korea.
The huge factories where those parts are turned into finished Apple products are largely based in China. But that too is changing.
In 2022, Apple assembled just 5pc of iPhones and other gadgets outside China, according to JP Morgan. However, the company reportedly hopes to make a quarter of iPhones in India as soon as next year. Last year’s new iPhone models were the first manufactured in both India and China from launch day.
Apple is not alone in seeking to move production away from China. Extended Covid lockdowns there during 2021 and 2022, as well as political pressure, have pushed manufacturers to look elsewhere. The American Chamber of Commerce in Shanghai found that last year that a fifth of US firms operating in the country were seeking to move manufacturing abroad, and two fifths were looking to redeploy investments originally planned for China.
But Apple’s move is symbolic. The company has been a totem of “made in China” for almost a quarter of a century and Tim Cook, its chief executive, has been seen as the architect of that strategy.
The shift is not just about manufacturing: Apple also faces growing concerns about its own business in the country.
According to figures from research company Counterpoint, Apple lost its position as market leader by smartphone sales in China in the first quarter of the year, falling to third place behind domestic manufacturers Vivo and Honor.
Its share of the Chinese smartphone market fell by 19.1pc to 15.7pc – its lowest since 2020.
The company has been squeezed by a resurgent Huawei, whose smartphone business came close to death but which has become a national champion after overcoming US sanctions to develop advanced microchips. Apple’s position has not been helped by Beijing telling government workers not to use iPhones and other foreign devices.
On Thursday Apple is expected to report quarterly results confirming the concerns. Analysts forecast the company will report sales of $15.9bn (£12.8bn) in China, down 11pc year-on-year and the third consecutive quarterly drop.
Concerns about Apple’s travails in China have seen the tech giant’s share price fall around 11pc so far this year, wiping more than $300bn off its market value.
There are further clouds on the horizon. China is becoming an increasingly assertive online regulator, ordering Apple to remove WhatsApp and Meta’s Twitter rival, Threads, from its App Store in the country earlier this month.
A US bill to ban the Chinese-owned app TikTok, signed by President Joe Biden last week, may increase pressure on Beijing to respond accordingly, perhaps by punishing an American company like Apple.
Donald Trump, meanwhile, has said he will impose more tariffs on Chinese imports if he wins next year’s election. Those iPhones still assembled in China risk falling foul of those rules.
If pressure builds on Apple to shift overseas more rapidly, it would not be easy, says Mark Zetter, an electronics industry consultant.
“There’s nowhere else on earth currently that has the dynamics and the supply chain infrastructure that China has. For one destination to compete with China, I just don’t see that happening in my lifetime,” he says.
Cook, for his part, has sought to keep the peace. “There’s no supply chain in the world that’s more critical to us than China,” he told the state-owned China Daily newspaper on a recent trip to the country. That will continue to be the case. But bit-by-bit, Apple is chipping away at its dependence on China.
"It's tough to make predictions, especially about the future." Yogi Berra
"You can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in the future." Steve Jobs
SomeJuan: M1X... 16 cores of CPU, 16 cores of GPU, 4nm TSM fab, katy bar the door...
Jan 16, 2021 6:45:11 GMT -8
mercel: It's been a long strange trip - good to see you're still around (and in AAPL -my assumption).
May 10, 2019 9:48:32 GMT -8
Zeke: Long time no see. Nice to see familiar names still here.
Mar 25, 2019 11:42:52 GMT -8
sponge: Regarding the future of VR, I think it will be huge. I was a gamer when I was in college. But as an adult I lost interest. Last fall I flew up to visit my son at college and check out his new Vive set up. After playing with it for the weekend, I was
Apr 29, 2018 12:25:17 GMT -8
galleybob: thanks for your answer. I will copy and send to her
Nov 7, 2017 12:32:18 GMT -8
rickag: So since Jan 28th 2015 AAPL is up from 117.27 to 157.21
Aug 21, 2017 17:09:43 GMT -8
*
artman1033: VXAPL = 29.21 AAPL = $117.27 AFTER EARNINGS
Jan 28, 2015 11:54:46 GMT -8
artman1033: VXAPL = 44.94 AAPL = $110.39 BEFORE EARNINGS
Jan 27, 2015 8:12:53 GMT -8