US-based technology company Apple’s reliance on China is looking increasingly like its biggest handicap.
The world's most influential consumer electronics company shed $44 billion of market value on Friday after a pair of pronouncements from Beijing and Washington cast a spotlight on its vast Chinese production base, from which almost all of the world's iPhones are made.
US President Donald Trump this weekend "ordered" American companies to immediately start looking for alternatives to manufacturing in China, which is something Apple is thoroughly unprepared for, said analyst Daniel Ives of Wedbush Securities.
"In a best-case scenario," said Mr Ives, Apple "would be able to move away 5 to 7 per cent of iPhone production out of China" over the course of 18 months. The company would require three years to move 20 per cent out, he said, which is still less than the 25 per cent of iPhone production that Apple needs for its domestic US market. American tariffs on goods from China would therefore directly impact Apple's biggest moneymaker.
Mr Ives calls Mr Trump’s latest comments on China “a gut punch to Cupertino” in the title of his report.
Apple's main assembly partner, Foxconn, said that it has the capacity to build all of the Cupertino company's US-bound iPhones outside of China, but to do so would require a great deal of time and money. Apple's stock price took two big hits on Friday after the latest tariffs announcements.
People familiar with iPhone production have said that it is nearly impossible to relocate manufacturing of Apple's iconic device in a wholesale manner due to the difficulty of procuring a skilled labour force elsewhere, a point that Apple's chief executive Tim Cook has hammered away at in public as well. The challenges of replicating the complex production lines and necessary infrastructure are also big hurdles.
While Apple has asked at least some suppliers for proposals on ex-China production, there’s no sign the Cupertino company is preparing for a large-scale migration.
In one case, an assembler proposed a location outside of China, but Apple rejected it and the supplier ended up expanding in China. The recent effort by GoerTek to shift some of its AirPods production to Vietnam was done by its own volition, people familiar with the decision said. But neither of those relates to the iPhone, which remains chiefly made in China, with some assembly of older models happening in India and focused on the domestic market there.
Tim Cook’s ability to lobby Washington for tariff relief will be tested over the coming weeks. He has so far been able to obtain a temporary reprieve for iPhones, iPads and Apple laptops, which won’t be subject to US tariffs until December 15. But going forward, unless an unlikely rapid resolution to the trade war is reached, Apple looks like it will have to draw up comprehensive plans for building iPhones outside of China, however costly that may be.
Top 10 in the F1 drivers' standings
1. Sebastian Vettel, Ferrari 202 points
2. Lewis Hamilton, Mercedes-GP 188
3. Valtteri Bottas, Mercedes-GP 169
4. Daniel Ricciardo, Red Bull Racing 117
5. Kimi Raikkonen, Ferrari 116
6. Max Verstappen, Red Bull Racing 67
7. Sergio Perez, Force India 56
8. Esteban Ocon, Force India 45
9. Carlos Sainz Jr, Toro Rosso 35
10. Nico Hulkenberg, Renault 26
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
The specs
Price, base / as tested Dh960,000
Engine 3.9L twin-turbo V8
Transmission Seven-speed dual-clutch automatic
Power 661hp @8,000rpm
Torque 760Nm @ 3,000rpm
Fuel economy, combined 11.4L / 100k
500 People from Gaza enter France
115 Special programme for artists
25 Evacuation of injured and sick
Mohammed bin Zayed Majlis
TRAP
Starring: Josh Hartnett, Saleka Shyamalan, Ariel Donaghue
Director: M Night Shyamalan
Rating: 3/5
Day 2, stumps
Pakistan 482
Australia 30/0 (13 ov)
Australia trail by 452 runs with 10 wickets remaining in the innings
SPECS
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Sholto Byrnes on Myanmar politics
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
Engine: 5.6-litre V8
Transmission: seven-speed automatic
Power: 400hp
Torque: 560Nm
Price: Dh234,000 - Dh329,000
On sale: now
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
