Skip to main content

Apple: Things are changing in China

A few weeks ago Apple announced that production of the iPhone would be shifting out of China in a roundabout way -- in essence Apple announce that 10% of iPhone production was now assembled in India, doubling the Indian output.

A few days ago, one of Apple's main China partners (Taiwanese-based) Wistron shut down its largest assembly Chinese-based assembly plant.  As of May 15, there are only two employees left on site and all the assembly equipment has already been removed.  The plant was shut down permanently on April 26.  Many Chinese lost their well-paying jobs and this will impact the city as a whole.  BTW the Taiwanese's contract had been up since the beginning of 2023, and there were issues that Wistron and Apple seemed to be unable to resolve -- in addition, the Biden's administration recent ruling made the sale of certain equipment to China impossible -- it is unclear if these new rules played a role in the non-renewal of the contract with Wistron

In addition to the widely reported increase in Indian iPhone production little has been said about the rise of Vietnam as an assembly site for the iPhone.  It seems few want to discuss this.

For Apple the issue was threefold:  (1) finding qualified workers to assemble its telephones, (2) wages in China have been rising very quickly, over the past decade wages have risen nearly 14-fold, and (3) the Chinese response to the pandemic has been clumsy and generally counterproductive therefore substantially damaging Apple's delivery logistics.  Individually, these problems were manageable - with increased automation, but all three together were a game-stopper for the company.  Vietnam's and India's solutions became attractive alternatives (in addition to increased automation).  

For the past few years, China's tone vis-a-vis the US has become increasingly harsh, mostly for internal political reasons the CCP has been acting as if it was equal to the US in its military might and trading acumen.  First, China is very dependent on the export markets of the US and Europe, which is fine, but China relied on PAX America to control free trade across the world, and more specifically oil trade where America has no need for such products (the USA is now self-sufficient in oil).  It is evident that America has lost interest in being the policeman of the world.

The make-up of the USA force projection fleet is indicative of a war-driven makeup instead of a peacekeeping mission.  The world has failed to notice that America's Navy is now made of 14 carrier groups with only 70 frigates, This is not a new phenomenon, but a doctrinal shift when Trump told Europe that it had to meet the burden of its own defense, he was bluntly saying what Bush and Obama had said quietly.  Germany, Belgium, Netherlands, Spain, and  Portugal told America to F-off, and the French and the Brits started re-arming...  America has no interest in being the policeman of the world, and its force deployment strength is no longer able to meet that requirement.  BTW by 2030, the number of Frigates and destroyers will have shrunk by half.  The other half is needed to provide carrier group security.

Comments

Post a Comment

Popular posts from this blog

Ok so I lied...a little (revised)

When we began looking at farming in 2013/14 as something we both wanted to do as a "second career" we invested time and money to understand what sector of farming was profitable.  A few things emerged, First, high-quality, source-proven, organic farm products consistently have much higher profit margins.  Secondly, transformation accounted for nearly 80% of total profits, and production and distribution accounted for 20% of profits: Farmers and retailers have low profit margins and the middle bits make all the money. A profitable farm operation needs to be involved in the transformation of its produce.  The low-hanging fruits: cheese and butter.  Milk, generates a profit margin of 5% to 8%, depending on milk quality.  Transformed into cheese and butter, and the profit margin rises to 40% (Taking into account all costs).  Second:  20% of a steer carcass is ground beef quality.  The price is low, because (a) a high percentage of the carcass, and (b) ground beef requires process
Post a Comment
Read more

21st century milk parlour

When we first looked at building our farm in 2018, we made a few money-saving decisions, the most important is that we purchased our milk herd from a retiring farmer and we also purchased his milking parlour equipment.  It was the right decision at the time.  The equipment dates from around 2004/05 and was perfectly serviceable, our installers replaced some tubing but otherwise, the milking parlour was in good shape.  It is a mature technology. Now, we are building a brand new milk parlour because our milking cows are moving from the old farm to the new farm.  So we are looking at brand new equipment this time because, after 20 years of daily service, the old cattle parlour's systems need to be replaced.  Fear not it will not be destroyed instead good chunks will end up on Facebook's marketplace and be sold to other farmers for spare parts or expansion of their current systems. All our cattle are chipped, nothing unusual there, we have sensors throughout the farm, and our milki
Post a Comment
Read more

So we sold surplus electricity one time last summer...(Update)

I guess that we will be buying an additional tank for our methane after all.   Over the past few months, we've had several electricity utilities/distributors which operate in our region come to the farm to "inspect our power plant facilities, to ensure they conform to their requirements".  This is entirely my fault.  Last summer we were accumulating too much methane for our tankage capacity, and so instead of selling the excess gas, that would have cost us some money, we (and I mean me) decided to produce excess electricity and sell it to the grid.  Because of all the rules and regulations, we had to specify our overall capacity and timing for the sale of electricity (our capacity is almost 200 Kw) which is a lot but more importantly, it's available 24/7, because it's gas powered.  It should be noted that the two generators are large because we burn methane and smaller generators are difficult to adapt to burn unconventional gas, plus they are advanced and can &qu
Post a Comment
Read more