Apple/China: the technological trade war has not stopped

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China is crucial for Apple in two ways. First, for manufacturing; Second, for sales. So far, the company has navigated the tit-for-tat technological fight between the US and China with notable success. But it has increased its dependence on the country in the process. Despite deteriorating US-China relations, Chinese sales are now almost half those of Apple's "America" ​​market, up from just over a third in 2019. This week, Apple made a move to further increase revenue by selling its products on popular Chinese social media platform WeChat's online store. Like Tesla, Apple is an American company that outsells its domestic rivals, thanks to price cuts. The approach makes sense. China is the world's largest market for smartphones, as it is for electric vehicles. Although phone sales fell last year, Apple's own sales grew.

Its iPhones accounted for 18 percent of all Chinese smartphones sold in the first half of June, according to research by Counterpoint. Meanwhile, Apple is trying to prove to the US that it can untangle its supply chain from Job Function Email Database China and bring production onshore. In 2018, it announced plans to invest $350 billion into the U.S. economy, later increasing to $430 billion. A recent deal with Broadcom to manufacture 5G phone chips in US states is part of this plan. China's multiple Covid-19 lockdowns spurred interest in alternative production sites, particularly in India. But wholesale diversification away from China remains a pipe dream. Apple still makes more than 90 percent of iPhones in China, according to IDC data. Note also that its newest product, the Vision Pro “mixed reality” headset, is being assembled by Luxshare, a Chinese contract manufacturer.



American technology companies, including Nvidia, have warned that American policies that restrict Chinese access to American technology risk harming American companies. This year, the Cyberspace Administration of China banned key infrastructure operators from buying products from chipmaker Micron, for example. The Idaho company's reaction was to announce more investments in Chinese manufacturing. For the US, China is both a customer and a supplier. Washington cannot change the relationship with one without having an impact on the other. Neither does Apple. When it comes to exiting China, the company's best bet is to continue its all talk, no action strategy.