Apple’s sales in China may be going well, but that doesn’t mean the company’s whole situation in China is great.
Turns out there’s an upside to working with a country that has an entire economic region dedicated to making the things you want to make and a downside. Most of the downside has to do with totalitarianism. Go figure.
When the Zhengzhou factory, where most iPhones are made, was hit by a Covid outbreak in October, Foxconn imposed an extreme lockdown. Not as much fun as extreme sports, this did not go down well with the workers and many of them fled the factory. Since their arms apparently weren’t long enough to continue making iPhones while away from the factory, this posed a bit of a production problem that continued into November when workers rioted over bonuses Foxconn failed to pay due to a “technical error”.
You know how that happens when you lock up your employees and then forget to pay them, right? So embarrassing. It almost seems like you don’t care about them at all and treat them like grist to the mill!
So it’s not particularly surprising to see headlines like this:
Apple is exploring moving some iPad production to India, sources say
India is exploring options to bring some of Apple’s iPad production to the country from China, according to two sources close to the Indian government.
The Macalope hasn’t met every operational person in the world, so he can’t say for sure that Tim Cook is the smartest operational person out there, but he is certainly the most successful. Yet people have been warning for years that such a heavy reliance on China could one day bite Apple. But you could definitely see the company’s mindset.
“It’s a place practically made for us! Cheap, seasonal, well-educated labor and all the different factories and support services side by side! What could go wrong?!”
Oh. That’s what can go wrong.
However, from an immediate cost-benefit analysis, it has always made the most sense to keep building things in Zhengzhou. You need look no further than that piece above to see why:
…sources warn that a lack of highly skilled talent and individuals with expertise in building highly complex devices like the iPad could delay these plans in India.
It’s easy to say, “Just make them somewhere else!” Try it. It’s remarkably simple. You can even do it in a funny voice.
But just because your friend Todd has his own soldering iron doesn’t mean Apple can move iPhone production to New Port Richey, Florida, even though the city started a sewer system improvement project over the summer. And the Macalope isn’t even going to mention Todd’s debilitating Funyuns addiction.
But he learns that he is a “12-bag a day” man.
Yuck. That is not healthy.
Apple’s dependence on China is a problem for the company. It’s a problem for almost every technology company. Since it’s a problem that “even Tim Cook” hasn’t been able to solve until now, it’s highly unlikely it’s as simple as opening a shop elsewhere. But you cannot solve the problem by continuing the dependency.