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Why Apple needs China.

Everybody's talking about Apple's killer earnings call yesterday. But the real news is Apple's sudden and total dependence on China, a dependence that will probably continue indefinitely.

Here's my analysis on why Apple desperately needs China in order to keep succeeding.

http://www.datamation.com/mobile-wireless/why-apple-needs-china-1.html

(Pic props: http://www.digitaltrends.com/mobile/china-becomes-apples-fastest-growing-iphone-market/ )
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22 comments
 
The awesome products and the crazy people.
 
Isn't it also an indication of saturation in the western market? Not everyone will replace his iDevice according to Apple's product cycles, so growth will be moving to new markets and once they are saturated the stellar rise will dip?
 
In the Steve Jobs Biography he has a meeting with President Obama and explains that Apple couldn't manufacture in the US because there isn't a big enough supply of engineers. If the US wants a slice of the manufacturing pie, we need to get serious about education.
 
there isn't a big enough supply of engineers, or cheap labours?
 
I agree Freeman I think it has a lot more to do with cheap laborers
 
México is cheap too, but only god knows why prefrer China
 
China does not just provide cheap labour, but more of tamed cheap labour. How many young people worked in Foxconn committed suicide amid pressured life there?
 
+A Freeman The suicide rate among Foxconn workers has been lower than the general public.
 
I am not so sure of that, but my point being, people living in China under a totalitarian state, unlike in the West, find it hard to say NO when they are under harsh working conditions.
 
Cheap labor is the go to excuse, but what Steve Jobs reveals is that its not the only problem. Here's a quote from the biography:

"Jobs went on to urge that a way be found to train more American engineers. Apple had 700,000 factory workers employed in China, he said, and that was because it needed 30,0000 engineers on-site to support those workers. "you can't find that many in America to hire," he said... If you could educate these engineers, we could move more manufacturing plants here."

Its easy to say that Apple is manufacturing in China because of cheap labor, but from the "horses mouth" you see that there are real practical reasons as well.

Steve Jobs loved control, and I think he would have loved having factories where he could easily visit and influence the colors of the machinery (like he did in the early days of Apple).
 
Even talking about engineers on-site, those in China must be a lot cheaper. Majority of those working in Foxconn alike are young people came from the countryside, they may get trained to do the job, but certainly not highly educated nor well trained prior to working there.
 
no china no china no china
industry of china is risk is risk for all company and all people .
 
+A Freeman makes a most excellent point.

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I hope it's not a reliance that will come back and bite them
 
Congress has forced out all the major companies to produce there products out the country...one is cheap labor..the taxes...and strict guidlines to follow 
 
I wonder how much of it is the other way around: Does China need Apple? Look at who the other major phone makers are: Samsung (from South Korea) and HTC (from Taiwan). Maybe China doesn't want to depend too much on companies based in anti-communist countries. It also puts Steve Jobs' comment about waging "thermonuclear war" in an ironic new light, though presumably countries would not wage war over cellphones.
 
China does depend on Apple inasmuch as investors can't invest in foreign companies. Chinese investors are investing in Apple's suppliers. If Apple pulls out, those investments will be almost worthless.
 
Nothing special in china except cheap labour and polute permition.
 
The chinese market is huge and China is developing so fast. Soon very one will have an iPad and iPhone like here. Apple is taking a positive risk here.
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