Dire predictions for Apple's supply chain, retail demand were wrong

The same sources who were deeply mistaken about Apple’s inability to sell the iPhone X were also far from the ground earlier this year in fantasizing about the disastrous impacts COVID-19 would have on Apple’s global supply chain , its presence in China and the effect that store closings and the economic downturn would have on demand for Apple products.


Apple’s supply chain and retail demand outlived COVID-19 better than expert claims

Apple’s recent introductions of its new iPad Pro 2020 and Magic Keyboard, a new line of MacBook Air, iPhone SE and the latest 13-inch MacBook Pro all suggest that the company’s ability to create and launch new products doesn’t has not really been affected by the current pandemic.

Company executives just noted during last week’s conference call that all of the new products launched in the second fiscal quarter “have all received exceptional customer response, even in these extreme circumstances.”

This includes both the entry-level iPhone SE, Apple’s cheapest new iPhone driven by its all-new A13 Bionic chip that is faster than the much more expensive Androids, as well as the new iPad The company’s premium pro $ 799 or $ 999 with LiDAR and its custom keyboard option of $ 350.

Retail trade sets new revenue record despite store closings

More surprising than the successful launch of its new products without the usual Apple event to promote them was the continued growth the company has experienced in its retail segment despite the closure of all of its sites in China, followed by massive closings in worldwide, which lasted for several weeks during the quarter.

Responding to a question about store traffic in reopened stores, Cook said that “store traffic [in China] is obviously up from what it was in February, but it has not returned to what it was before the lockdown. However, there was more online traffic. “

The shift in orders from retail stores to Apple’s online sales operations occurred as the company’s stores closed for three weeks in the second fiscal quarter following a shutdown of three weeks earlier in China. Cook said of the online ordering, “it’s pretty phenomenal actually.”

He added: “The retail business had a quarterly record for us during the quarter. This was despite the store closings. [] So there is certainly a movement [online]. And be it a permanent change, I would hesitate to go that far, because I think people like going out. They just know that now is not the time to do it. “

Apple Retail
Apple’s retail business grew despite store closings, customers went online to stay safe

Appleiphonestop was unique in predicting in February that much of Apple’s retail activity would move online when the stores closed, saying that customers “are not even too embarrassed to shop immediately. over the next few days straight from Apple’s online store. “

This thwarted media reports that no one would buy anything for the rest of this year, and they couldn’t either, since Apple stores were closed and most people were stuck at home. It’s as if these bloggers have all forgotten that the Internet exists.

Technical media get it wrong on the supply chain, get it wrong on the demand

Beyond just imagining the crisis for Apple’s retail operations, technology thinkers also largely agreed that Apple would be unable to manufacture anything in China and that its assembly partners and its supply chain would remain in ruins for an extended period. .

In February, Japan’s Nikkei Business Daily was quick to quote “four people familiar with the matter” to say that “public health experts” in China had determined “high risk of coronavirus infection” at Foxconn’s facilities where Apple assembles its products, which means that Apple would have great difficulty getting production back on track.

This confidently published Nikkei report was immediately denied by the Chinese authorities, but was treated by bloggers as if it were a controversy, “he said,” she said. sort of disagreement rather than just another purely false and scary report from a news agency that has repeatedly posted incorrect reports on Apple that are always attributed to “people familiar with the case” who end up never actually being aware of the facts, yet the Nikkei rarely recognizes even when his reports are incorrect.

There were even large-scale forecasts that Apple’s anticipated iPhone SE would be significantly delayed by the pandemic and not be shipped in Q2 as planned, and that even the iPhone 12 might not arrive as usual. this autumn. Yet even from the start, few observable facts seemed to support these claims, apart from the more anonymous attributions to “persons [suposedly] familiar with Apple’s plans. ”

iPhone SE delayed
So many words, so little journalistic value

Writing for the Wall Street Journal in March, Tripp Mickle fantastically portrayed Apple as being desperately stuck with much of its final assembly in China, and in desperate need to move production elsewhere – a task which itself was described as almost impossible .

Mickle confused Cook as having made a terribly naive decision to move Apple’s assembly to China in 1998, and described Apple’s CEO as being in a particularly good position to pay the price – as if virtually every large company electronics manufacturers had not moved to Asia long before Cook. had even joined Apple.

Every piece of Mickle was fake. That didn’t stop the rowdy media from joining the choir who agreed and hailed his work as “ deeply insightful ” rather than just being an uninformed contempt-clickbait who presented certain facts and ignored others who had not supported his story.

Tripp Mickle WSJ
Tripp Mickle is always wrong about Apple because he doesn’t have a basic understanding of the business

False on Apple’s supply chain, false on demand

During Apple’s Q2 financial results call, Cook appeared to be indirectly calling the Wall Street Journal saying that “our global supply chain is deeply sustainable and resilient. We have demonstrated the continued ability to address and manage temporary supply challenges like those caused by COVID- 19. “

Apple’s supply chain and assembly partners have proven to be just as resilient to the crisis as Appleiphonestop had predicted, based on previous performance from its exceptionally experienced Operations group. These are the same people that Mickle devalued as less important than the designers of art products in his previous cover taking Cook for the task of making Apple a global operational power rather than remaining an eccentric design office that shows the rest of the world how to design their products.

While manufacturing in China has largely recovered, economic turmoil in the United States has only just begun. The same voices that demanded that Apple bring its manufacturing “to the United States” are now witnessing the very fragility of the supply chain, much less sophisticated and of less value in America, for the slaughter of cows and pigs .

The United States is struggling to open the economy without a functioning public health system and without a real testing and monitoring system in place. And despite Apple and Google’s efforts to provide an anonymous and secure technical platform for large-scale contact tracking, the U.S. federal government is simply not trying to fully understand the pandemic through testing, in hope that the pandemic will go away on its own. , even as the deaths continue unabated.

Other advanced countries, notably South Korea and Germany, have also significantly reopened their retail and service industries, thanks to rapid efforts to test and detect infections. If Apple’s manufacturing efforts were concentrated in the United States, the company would be completely unable to compete with its rival peers, including Samsung in Korea, and Huawei and Lenovo in China, both of which have major businesses cited in Wuhan. , directly at the epicenter of origin of the pandemic. However, these Chinese operations have reopened, while America remains largely closed in a series of controversial battles for basic medical equipment.

Mickle’s play from a few months ago now seems ridiculously uninformed, as if the staff of the Wall Street Journal who worked on its creation had no real understanding of the global supply chain or the ability of the China to host and support its critical links technically. complex infrastructure, total ignorance of the extent of Apple’s operations worldwide, and a painfully naive understanding of the fragility of American industry and manufacturing, operating under the ideology of an existing social network hardly anyone, with the exception of large corporations that demand public bailouts whenever they are unprofitable.

If Apple had somehow moved its manufacturing to the United States, it would not be at all close to its current position as the world’s most valuable PC and phone maker, able to withstand a global pandemic, to bypass incompetence of various local governments, etc. comfortably located, it has the capacity not only to further develop its own work, but can also contribute materially to the supply and construction of necessary health protection equipment that the United States itself cannot line up alone.

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