On November 25th, Apple CEO Cook appeared in Beijing to participate in the 2nd China International Supply Chain Promotion Expo. This is Apple's second exhibition and Cook's third visit to China this year, demonstrating his emphasis on the Chinese market and Chinese partners.
Apple stated that over 80% of its more than 200 suppliers are produced in China.
When asked how to evaluate Apple's partners in China, Cook said, "I value them very much. Without our Chinese partners, Apple would not have achieved what it is today.
As of the time of writing, the stock prices of some Hong Kong listed Apple supply chain companies have risen, with Ruisheng Technology (2018. HK) rising 5.4% and Qiutai Technology (1478. HK) rising about 2%; However, the stock price of Apple's supply chain in the A-share market plummeted, with GoerTek (002241. SZ) experiencing a drop of over 6% and BlueThink Technology (300433. SZ) experiencing a drop of over 2%.
In the past month, Cook has visited China twice. According to CCTV News, on October 25th, Minister of Commerce Wang Wentao met with Apple CEO Tim Cook. Both sides had exchanges on the development of Apple's business in China and the economic and trade relations between China and the United States.
Cook stated at the time that China's rapid development has helped Apple achieve rapid and sustainable growth. The company regards China as an important market and key supply chain partner, and is committed to long-term development in China, continuously increasing investment in supply chain, research and development, and other fields. Apple is willing to continue playing a bridging role in promoting communication and exchanges between China and the United States in the field of economy and trade.
Unlike Tesla CEO Elon Musk's "whirlwind" visit to China strategy, Cook's recent visits to China have been limited to 3-5 days each time, and his itinerary is also quite extensive. For example, in March of this year, during his three-day visit to China, he participated in the opening of Apple's Jing'an store in Shanghai and met with mobile game producers at the Sanlitun store in Beijing; During his visit to China in October this year, Cook also visited Shunyi Farm in Beijing, met with students from China Agricultural University, and met with Yang Jie, Chairman of China Mobile.
It is worth noting that Cook's visit to China coincides with the upcoming new term of US President elect Trump. At present, the market is closely monitoring the impact of Trump's inauguration on the US technology industry, with taxation being a major concern.
According to analyst reports from brokerage firm Jefferies, Apple's profits may be significantly affected by potential tariff policies. In the worst-case scenario, the cost of each iPhone may increase by $256, which would have an impact on gross profit margin of approximately 7%.
Will the Trump administration introduce new tariff policies targeting Chinese made iPhone components? Canalys analyst Peng Luping told First Financial reporters, "Although it is difficult to predict the strength of the new US government's policy implementation in the market, the overall direction should still focus on some high-end technologies as the main core targets, such as AI and high-end chips, to ensure the economic growth and resource security of the United States
The reporter found that the "fruit chain" companies in A-shares have not yet entered Apple's core chip supply chain, and are mostly concentrated in areas such as cameras, batteries, and heat dissipation.
According to recent reports from Indian media, Apple is in talks with over 40 Indian suppliers to transfer some of its iPhone supply chain. According to relevant data, as of March this year, Apple has assembled iPhones worth $14 billion in India, accounting for 14% of its global production. Apple notified its suppliers in early 2023 that it was preparing to gradually increase the proportion of Indian made iPhones from 7% in 2023 to 20% -25% within two years.
But establishing a supply chain in India is not something that can be accomplished overnight. India does not have a huge network of material and equipment manufacturers like China, and most of the components in the Indian supply chain still need to be imported from China, as well as expensive transportation costs, which will increase the overall cost, "an Indian investor told First Financial reporters.
In addition, India's infrastructure and power equipment also need to be improved. Therefore, some analysts point out that in the coming years, India's growth in Apple's supply chain will be limited to the assembly of final products, and more critical electronic and mechanical component production will still be concentrated in China.