China’s competitiveness was based on low wages, low welfare, and low human rights.
What this book contends is that China wouldn’t be China today without Apple. Its investments in the country have been spectacular, rivaling nation-building efforts in cost, man-hours, and impact.
Apple estimates since 2008, it has trained 28 million workers
Apple’s investments in China reached $55b per year by 2025. This doesn’t include cost of components, which would double this.
This is quadruple the amount the US commerce secretary considered a once in a generation investment (CHIPS act)
LG invested 1.7£ in Wales to build iMac production, but after just a year, production was halted entirely, never to resume.
No country was more important to Apple than Taiwan in the first five years of Steve Job’s comeback. The entry level iBook and PowerBook were assembled in Taiwan.
Dell was known for getting angry when Dell Computer was earning too much since it indicated his customers could be getting even lower priced
Execs joked at Gou was worth $2b in nickles and dimes.
By the late 1980s, the entire 105 mile route from Hong Kong to Guangzhou was lined on both sides with factories.
In just 25 years, Shenzhen’s population grew 100 fold
Some say Terry Gou is only second to Deng Xiaoping in transforming China. The reason Shenzhen is Shenzhen is Terry Gou.
On the day Tim Cook took over the weekly operations review, it went for 13 hours.
He’d work so long and consistently Apple assigned him two adminstrative assistants who split the day. One worked from six to two, the other worked from two until whenever he went home.
The meeting of the minds between Jobs and Ive made Apple products unique, but it was Gou and Cook that made them ubiquitous.
Gou rotated his works on Apple projects to maximize learning. They used their new skills in areas that were more lucrative. Apple would then be forced to teach a new cohort of people.
In 2000, the first year Foxconn performed major operations for Apple, it had reported net margins of 10.6%. As it got more work with Apple, revenues soared while margins plummeted to 4.6% in 2007 and then 2.4% in 2011.
When the procurement team would meet in Hong Kong or Shenzhen, each would be given the same amount of currency, then sent off to the local market for a set time. Whoever came back with the most silk tied was the winner.
Like Uber became the largest taxi provider without owning a vehicle, Apple was discovering how to be the world’s largest manufacturer without owning any factories.
Tim Cook had once described inventory as fundamentally evil likening electronics to dairy products that might spoil.
The combination of big spending and a design-first culture enabled Apple to come up with production techniques that others could afford or even imagine.
The license for a family-owned sewing machine repair shop became the legal basis Apple used to establish a multibillion dollar retail presence
America had only four cities with a population over two million; China had at least forty
Demand was so great that Apple closed the Genius Bar just to make room for cash registers, at peak hours there were thirty registers running at once, each processing a transaction every two minutes.
A study of college students in Wuhan found that 20k people had taken out loans with twelve month interest rates as high as 47 percent to buy fancy electronic products, 90% of which were Apple
Nobody in the West can ever understand how China attracts so many factories. It’s literally — you’re given land. They’ll build the infrastructure for you. If you expect the buildings, they’ll build them for you. They’ll help you with your interprovince migration. If there’s not enough labor in the zone they want you to go on, they’ll get you the people and they’ll bear that cost.
Apple estimated there was 10k fake stores in China in 2012
It took Apple more than five years to deter bad actors, by serializing every major component within the iPhone.
The iPhone accounts for fewer than 20% of smartphones sold around the world, yet it routinely more than 80% of the industry profits.
China let Tesla in and benefitted from a similar training of the EV supply chain. It worked well increasing the share of EVs from under 5% in 2019 to 38% in 2023.
“in this game, one American company—Tesla in cars and Apple in phones—gets to win, they don’t care if all their US competitors lose. It’s actually better for them. But on the other side, all Chinese companies win.”
Apple was sending so many engineers to China on temporary trips they convinced United to begin direct flights from SF to Chengdu. This became United’s longest nonstop flight
You don’t get to do business in China today without doing exactly what the Chinese government wants you to do. Period. No one is immune
China’s strength has been less about the abunden of labor and more about their allocation and flexibility. State support in filling factories with migrant labour has been critical. India doesn’t have a culture of internal migration. One study found it had the lowest rate of internal migration among 80 countries.
What China offers is not simply labour, but an entire ecosystem of processes developed over more than two decades.
It is estimated that if Taiwan were prevented from exporting chips, the global loss would be somewhere between $600b and $1t on an annual basis
When Apple first hit the $3t valuation in January 2022, it meant Apple’s market value had grown by more than $700m per day when Cook took over in August 2011.