Apple’s reliance on China reviews Cook’s policy

Bloomberg has expressed concern about Apple’s reliance on China for FATP (final assembly, test, and purpose). Mark Gurman points out that Tim Cook, when he was the head of the company’s operations, was responsible for the decision to use China as a hub. For many years, we have been warning about Apple’s reliance on China. We wrote in 2017 that Apple is in a very different position today than Google did in 2010. While Google has big plans for the country, it does not depend on the market. Apple is the most stressed. Not only because China has the largest smartphone market in the world – and as important as Apple as the rest of Europe – but because

Apple is working on this, with new manufacturing companies in India, Vietnam, Indonesia and elsewhere. But my view is that there may be a need to increase these efforts to such an extent that it can, if necessary, abandon China as a whole manufacturing base. One night scene can easily lead to another. China can be confident by what it sees in Ukraine, and decide that it is finally time to take control of Taiwan.

Putin just pointed out that the West could not take any kind of military action to protect Ukraine; The threat of an all-out nuclear war is too great. All our troops can do is sit back and watch, and hope that the sanctions of the system will be finally effective. The same will be true of Taiwan […]

Much of the world will also impose financial sanctions on China, although the impact of the global economic crisis will be high. But can Apple be able to hold a process stand there? It will not only sacrifice a large portion of its sales within the country itself, but will also be fully capable of meeting market demand for the rest of the world if it stops Kannada production.

We have always acknowledged that Apple could not do it overnight, and that the company has progressed over the years in innovation and assembly processes, but the speed of that is glacial. It has been five years now that even street commentators can see the writing on the wall, and the Cupertino company still seems slow to take decisive action. Bloomberg’s Mark Gurman said the company’s warning that the current quarter could fetch $ 4B to $ 8B worse is further evidence of the magnitude of the crisis, especially in the immediate aftermath.

Apple Inc. likes to say that its supply chain is global and does not rely heavily on China. The fact is that Apple relied on the country for production, and this relationship has caused headaches for the company, investors and customers during the pandemic. That was particularly evident on a second-quarter company conference call last week, when Apple warned that supply shortages – caused in large part by Covid-19 locks in China – would reduce sales by as much as $ 8 billion. That seems like the loss of a quarter of all iPad sales. Gurman notes that Cook is the architect of the conference model based on China.

The real bottle in production is a assembly process, well known between Apple and the manufacturing space as FATP. That represents the final assembly, test and purpose. Most of Apple’s devices go through that process in China. That’s why your MacBook Pro, iPad or iPhone probably says, “Assembled in China.”

It is a model in which Cook pioneered himself, intervening nationally as cars were imported from around the world. While COVID-19-related disruptions may be temporary, Gurman works through a whole series of Chinese-related issues that the company has experienced over the years, and suggested that the company should spend some your huge cash back on investment is huge. faster machine diversification system. Maybe those billions will spend better on creating a new, much more global conference chain — and even a strong push for automation.

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