Facing Hostile Chinese Authorities, Apple CEO Signed $275 Billion Deal With Them (theinformation.com) 83
Interviews and internal Apple documents provide a behind-the-scenes look at how the company made concessions to Beijing and won key legal exemptions. CEO Tim Cook personally lobbied officials over threats that would have hobbled its devices and services. His interventions paved the way for Apple's unparalleled success in the country. The Information: Apple's iPhone recently became the top-selling smartphone in China, its second-biggest market after the U.S., for the first time in six years. But the company owes much of that success to CEO Tim Cook, who laid the foundation years ago by secretly signing an agreement, estimated to be worth more than $275 billion, with Chinese officials promising Apple would do its part to develop China's economy and technological prowess through investments, business deals and worker training. Cook forged the five-year agreement, which hasn't been previously reported, during the first of a series of in-person visits he made to the country in 2016 to quash a sudden burst of regulatory actions against Apple's business, according to internal Apple documents viewed by The Information. Before the meetings, Apple executives were scrambling to salvage the company's relationship with Chinese officials, who believed the company wasn't contributing enough to the local economy, the documents show. Amid the government crackdown and the bad publicity that accompanied it, iPhone sales plummeted.
"Capitalists will sell us rope we'll hang them w/" (Score:5, Insightful)
The full quote is actually “The Capitalists will sell us the rope with which we will hang them.” Vladimir Ilich Lenin
I think this says it all. Companies will make any bargain in order to get access to China's huge markets and population. One can only imagine what types of under-the-table dealings supplemented the above dealings.
That makes the courage shown by the Women's Tennis Authority all the better: They are willing forgo incredible revenue in order to protect the well-being of just one female player. Good for them. Shame on Apple, shame on the NBA, and shame on John Cena.
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The Chinese Communist Party are many things, and importantly, they are industrialists. In that regard Tim Cook is a kindred animal. Consider also Stalin's praise of Henry Ford's industrialism.
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How exactly has Apple hung itself when the iPhone is now the best selling phone in China? Seems like the deal worked out spectacularly well for them.
The real issue is that they abide by Chinese laws that require them to give the government access to user's data. They disable security features to comply with requirements to not lock them out when they want to access someone's phone. That was a choice, and one which Google decided was something they were unwilling to do. Apple, and Microsoft for that matter,
Re:"Capitalists will sell us rope we'll hang them (Score:5, Insightful)
Your correct in that Apple has not hung themselves: Instead, if we look at the broader aggregate of foreign companies doing business in China we see a tragedy of the commons situation where in the whole, non-Chinese firms have hung themselves.
By giving into their demands for "security" and "privacy" reasons, they have given the Chinese government leverage over their company. Apple can no longer afford to stand up to China because it represents a huge portion of their market share, and their profits and share price would collapse if they did so. In fact, so much of their manufacturing happens in China that Apple would essentially be out of business if it sufficiently upset China.
Western entertainment companies now need to bend their offerings to either attract Chinese viewers or (at a minimum) not upset Chinese authorities.
Meanwhile, China engages in wholesale theft of intellectual property, suppression of civil rights, threatens its neighbors, etc.
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You will have to get used to stuff being tailored to Chinese audiences. Too much money to pass up. Capitalism working as intended.
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Have we already forgotten? This has already happened, pre-pandemic, even.
The NBA had to do a lot to win back audiences after a coach tweeted some anti-China thing.
ActiBlizzard got in deep trouble for removing the winnings of a player who won a competition because they were saying Free Hong Kong during the height of the HK protests in 2019. In fact, the commentators basically star
Re:"Capitalists will sell us rope we'll hang them (Score:4, Informative)
How exactly has Apple hung itself when the iPhone is now the best selling phone in China?
You're confusing tactical and strategic. Tactically, Apple has done well. Strategically they have shown China how weak they are.
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How exactly has Apple hung itself when the iPhone is now the best selling phone in China?
You're confusing tactical and strategic. Tactically, Apple has done well. Strategically they have shown China how weak they are.
Strategically, they were already that weak and everyone already knew it.
At least they got some short term tactical profits before it all goes pear shaped.
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Apple also had to give the Chinese government access to basically anything they want. All of their secret sauce, so to speak. Every company that wants to do business in China eventually has to do this. That way in a few years a bunch of phones from a Chinese company will hit the market and will have all of the capabilities of an iPhone but at a much lower price point, but of course they would never actually STEAL Apple trade secrets, no no of course not.
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That was a choice, and one which Google decided was something they were unwilling to do.
By leaving, Google surrendered its market to Baidu and Alibaba, which are even more compliant with the demands of the CCP.
So buy leaving, Google hurt themselves, hurt the Chinese people, and helped the CCP.
Apple, and Microsoft for that matter, chose differently.
Yes, Apple and MS had more sense.
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> By leaving, Google surrendered its market to Baidu and Alibaba, which are even more compliant with the demands of the CCP.
There have been actors that are 100% dedicated to the CCP's will since its inception. Nothing changed on that front, so I'm not sure why you think that's important.
> So buy leaving, Google hurt themselves, hurt the Chinese people, and helped the CCP
That is incorrect. The CCP has had to (and will continue) to do more work to circumvent and block Google. This is a net good, compare
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Apple: We think of your privacy first. Unless you're a Chinese citizen.
CCP: We want more money. GIVE US MORE MONEY!!!
Apple: Okay, but you have to let us to X, Y, Z
CCP: Okay, then MORE MONEY!!!
Apple: Signs dotted line.
Every Government Should Ask Multinationals... (Score:2)
... for investments and training. If a multinational is extracting more from your country than you're getting, shut them out. I want the US government to do the same.
Re:"Capitalists will sell us rope we'll hang them (Score:4)
Re: "Capitalists will sell us rope we'll hang them (Score:1)
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That makes the courage shown by the Women's Tennis Authority all the better: They are willing forgo incredible revenue in order to protect the well-being of just one female player.
Courage? In Tim Cook's world, courage consists of things such as eliminating headphone jacks; it has nothing to do with hard decisions such as foregoing revenue in order to not support oppression and tyranny.
How very Apple (Score:1)
Paying through the nose and bribing a foreign government to save its image. That's very Apple.
Re: How very Apple (Score:2)
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that's what serious countries do (Score:4)
Re: that's what serious countries do (Score:5, Insightful)
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But, I agree that the decisions to move pretty much ALL manufacturing over seas to save sometimes just pennies per component are going to bite western countries in the ass sometime soon, and in a BIG way.
Re: that's what serious countries do (Score:5, Insightful)
2. "if you tax us it will cost more" is a classic extortion bluff used by companies and their shills. No they won't hike the prices if you properly tax them, because their competitor who has no problem with paying the taxes will fill the void. proof: apple decided to invest 275b instead of hiking prices...
Re: that's what serious countries do (Score:2)
The rise in cost isn't purely taxes but largely labor costs. You would need to hike taxes up absurdly and varied between country or manipulate your currency to make this work. I think all are illegal by the WTO.
Re: that's what serious countries do (Score:2)
Let's set aside the massive costs to build, staff and run real manufacturing facilities in the US, how many people are going to pay $2,000 for something that cost them $1,000 the last time they upgraded?
It more than likely wouldn't cost anywhere near that as Apple's margins are already really high. Even if they did charge that much, Apple customers are already used to getting fucked so they'll still buy it anyways. That's exactly what Apple's buy now pay later plan is designed for: Give them the illusion that they can afford it even when they can't.
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There's plenty of margin in iPhones, they will be able to absorb a lot of that cost.
I don't think it's worth chasing what amount to fairly low skill assembly jobs and warehouses full of robots though. China is transitioning to higher skilled jobs already, just like a lot of Europe did. Ever since we started industrializing that has been the case. There was a blip in America during the 40s and 50s when other countries were in ruins, but you can't go back to that now.
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But, I agree that the decisions to move pretty much ALL manufacturing over seas to save sometimes just pennies per component are going to bite western countries in the ass sometime soon, and in a BIG way.
Wrong tense of the verb - our asses have already been bitten. If they hadn't been, Intel wouldn't have gotten up off its own ass in such a huge hurry to start building semiconductor fabs in the US again. And here in Canada, it's big news that we're once again making N95 masks, and we're still trying to rebuild our once-robust vaccine manufacturing capability.
Globalization is great until it fails - and when it does, it fails hard. You can't build long-term viability on a lack of diversity and a multitude of
By your logic, they'd be made in Vietnam-5% labor (Score:2)
Let's set aside the massive costs to build, staff and run real manufacturing facilities in the US, how many people are going to pay $2,000 for something that cost them $1,000 the last time they upgraded?.
Most estimates place the labor cost of an iPhone to be less than 5% of the retail cost. You're suggesting building the iPhone in the USA would double the cost. The math just doesn't work out. Many studies state Vietnam labor is half the cost of China. Others state that American workers cost similar cost to Chinese ones due to productivity. I am not an expert, just an interested enthusiast who enjoys reading about this, so I am not sure which metric is most credible. Caveat: No one but Apple and thei
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They're nothing of the sort but it's frustrating because they can be used as a boogeyman against the government doing anything good. So when people like me call for universal healthcare
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... most if not all of that $275 million is going to a handful of people at the top of China's social hierarchy. Especially ironic and biting considering they claim to be a egalitarian communist society.
If TFS is correct, that's $275 billion. That many millions is hardly chump change; a thousand times that many millions makes my head spin.
...when people like me call for universal healthcare we get shouted down by people saying you don't want to be like China.
When they offer that shit as an argument just point out that Canada, the Scandinavian countries, The Netherlands, Germany, the UK, Japan, and Switzerland - along with probably a couple dozen other countries - have universal healthcare. In fact the US is in a pretty small minority in this regard.
Typo (Score:2)
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Most commenter missed fact that Apple made out .. (Score:1)
Re: Most commenter missed fact that Apple made out (Score:2)
But... but... but late-stage capitalism, bro
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A company with principles. Apple has more than enough money to get by without China's business but they kowtowed to China's demands. Most companies would face a decent amount of backlash but Apple users are unique in that they'll vehemently defend Apple's behavior, even when it goes against their own best interest.
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Apple has more than enough money
You're new to this Capitalism thing aren't you...
At least, our data and privacy are "safe" (Score:2)
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No kidding. I'd stick with Android if I were you.
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The fuck? You mean hiring all those hundreds of thousands of Chinamen to assemble the iPhone in country is "not enough"?
It would be enough for a next quarter focused American.
But these are smart long term thinking Chinese people.
Of course they wouldn't settle for scraps. As clearly shown there was a $275 billion better deal just waiting to be had.
So noble... (Score:5, Insightful)
Re: So noble... (Score:1)
Re: So noble... (Score:5, Insightful)
China's treatment of the Uyghurs has similarities to the Nazi treatment of Jews in the early years of their rule. That doesn't mean it will follow the same path to the end.
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Even if that was true, that in no way justifies what China is doing.
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Maybe China should let western journalists visit the facilities instead of banning them from the whole region.
Re: You're an idiot (Score:2)
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So you are saying China isn't an oppressive regime?
Re: You're an idiot (Score:2)
Not quite... (Score:3)
China's goal with the Uyghurs is more akin to what the United States did to the Native Americans: destruction of culture. Take the young, teach them the national language, make no mention of their religion, cut their hair, and dress them in appropriate clothing. What remains is a hollow shell of a person who can be easily exploited. Not to mention they become a really cheap labor force.
From the onset, Hitler was hell bent on the destruction of Jews. Forget their culture. Hitler literally destroyed six
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Are forced organ harvesting, sterilization abortio (Score:2)
ns and medical experiments better than gas showers, medical experiments, and ovens? There are plenty of other similarities, including appeasement [wikipedia.org] How did you make that call?
Re: So noble... (Score:2)
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Im sure Tim would have bent over forward for Hitler also to peddle their wares to Nazis.
No. That's unconscionable. No American technology company would ever stoop so low [wikipedia.org].
Sidenote: Welcome to capitalism.
But is this good for Apple Shareholders? (Score:2)
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Dec 07, 2021 10:47 AM : Market Open
New High +3%
AAPL Apple Inc. $170.32
You can predict it all you like. (Score:2)
"Selling out" is not new for Apple (although the applicability of the phrase is debatable)... but so far...
https://www.google.com/finance... [google.com]
Sellout (Score:3)
Just that, a sellout.
Imagine if he did it for his own country - (Score:2)
Assuming the US is his country. Maybe not. How about Apple get its head out of Silicon Valley and provide manufacturing jobs here? Perhaps because it's so expensive to do business in the USA.
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Apple can't have iPhones made in the US, no matter how much you want them to.
We can't even manufacture the assembly screws and connectors needed,
let alone have the ability to provide a pool of workers intelligent, agile, reliable,
and sober enough to meet the required scale, planning, and logistics.
Have you looked around lately? Yikes.
Re: Imagine if he did it for his own country - (Score:2)
To be clear . . . (Score:2)
I mean, Standard Oil got their free pass around 80-100 years ago . . . lots of individuals and companies since then. Why feign outrage if nothing ever changes?
As for me, that's my secret (Captain), I'm always angry.
Privacy First (Score:1)
Whoa (Score:2)
Linking the economic fortune of not just the US but the world's largest cap company, via binding it to undisclosed concessions that favor China's reach toward economically overtaking the US, at the expense of the latter, then hiding it for years totally doesn't sound like either a national security risk on the side of the US, or a giant risk for Apple shareholders, since Apple may be subjected to counter-legislation by the US which forces it to renege on points of the agreement.
As such, this, and even prepa
"Big enough to give you everything you want..." (Score:1)
It's almost as if a nation whose government has massive regulatory power and nationalized industries, ends up using its total monopoly control of commerce, health, communications, and legislation, to bully everyone into submission.
It's almost as if a massive regulatory government doesn't prevent corruption and plutocracy, it just behaves as an invasive apex predator who displaces the diversity of a corporate market ecosystem with one giant honeypot of power/corruption to rule them all. Which is why every ce
Just another reason to boycott Apple (Score:1)