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TechCheck+ Apple’s China problem: how its ticket to success has become a liability 10/27/23

TechCheck

CNBC

Disruptors, Tech, Technology, Cnbc, Management, Business, Faang, Investing

4.566 Ratings

🗓️ 27 October 2023

⏱️ 12 minutes

🧾️ Download transcript

Summary

Apple can thank China for much of its success. In the early days, as Apple was on the brink of bankruptcy, it pivoted its manufacturing to China, capitalizing on a massive low-wage workforce, billions in government stimulus to build out enormous factories, and the loyalty of a rapidly growing middle class. But now, what was once a key to its success has become a liability. In just the past few weeks, it’s seen a tax investigation into its biggest manufacturer, accusations of censorship around Jon Stewart’s canceled show, and has lost its market share dominance to competitor Huawei. This week on Tech Check, we dive into Apple’s China problem, and why it’s not going anywhere.

Transcript

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0:00.0

Apple can thank China for much of its success.

0:05.0

Access to cheap manufacturing,

0:10.0

a fanatic iPhone base, even billions of dollars from China's government to build out infrastructure.

0:17.0

And China owes no less to Apple.

0:19.4

The rise of its middle class, sprawling cities filled with skilled workers, and the creation of a

0:24.9

booming technology market, but it's come at a price, protesters at a major supplier.

0:30.3

Facing off with local competition, accusations of censorship.

0:36.0

I don't think this is what we want in this country.

0:38.0

I don't think we want people telling us what we can say or what we can watch.

0:40.0

And perhaps most importantly, giving up some control of its prized supply chain.

0:44.6

Right now China is in control but they're playing it so that it's more of a game of

0:48.8

chassis when everybody else is kind of playing checkers.

0:51.6

This week on Tech Check we dive into Apple's China problem

0:54.4

and why it's not going anywhere.

0:58.2

Let's not kid ourselves,

0:59.4

you know, this idea of a moral high ground

1:01.8

that somehow our problem with China is their treatment of

1:06.0

Uyghurs or their labor camps like that's a joke. That was John Stewart whose

1:11.1

Apple TV Plus show was just canceled.

1:13.4

So the New York Times reporting, Stewart walked away from the show

1:16.4

after planning to do segments on topics like China and artificial intelligence.

1:20.8

But according to the report, Apple pushed back on those topics and

...

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