Apple and Google leave China due to Covid and tensions, but the escape is not easy

The love story between big American companies and China seems to have cracked. The aggressive politics did not go down zero Covid with which even large industrial centers are put in lockdown for a few infections, and not even the growing tension with the USA over Taiwan, the “source” of chips and components. Mind you, the bulk of the production of the big names in technology remains and will remain in Chinaat least in the short term, but it has been clear for some time that all major US companies have acknowledged the fact that being totally dependent on China is not convenient.

Big companies like Apple or Google are real pachyderms, so move even a small part of the production of a product with huge numbers like iPhone it is not easy for several reasons. Yet, according to information gathered by the New York Timeswhich took a sort of snapshot of the production dynamics of the two giants, already part of the next two models – iPhone 14 and Pixel 7 soon on the market (the first very soon) – will not arrive from Chinese factories but Indian for Apple and Vietnamese for Google .

Both Apple and Google want to avoid getting involved in matters that don’t directly concern them. A possible conflict, even if only commercial, between Taiwan, China and the USA would be inconvenient to say the least, so the two companies (but they are not the only ones) try to keep balance between Chinawhich continues to be the country of reference for the production of consumer electronics despite the fact that in August the numbers went down for the second consecutive month, and nearby alternatives such as India or Vietnam. This is why we move on tiptoe, keep China good but look around.

It’s not just about smartphones. Different Xbox from Microsoft come from Vietnam, Apple already assembles the AirPods in Vietnam and is preparing to do the same with the AirPods Pro 2 but also with the MacBook and Watch, Amazon produces the Fire TV in India, all products that until a few years ago were made in Chinese factories. Two people familiar with the matter heard by the NYT confided that the assembly of the first units of the iPhone 14, that is the most delicate phase, will take place in China, but at a later time. Apple will move some of the production to India to evaluate how much we can rely on in the future on New Delhi and its surroundings.

Another stimulus for change, the NYT points out, comes from cost of labor. Foxconn, by far the leading iPhone maker, sought 5,000 employees for the Bac Ninh plant in northern Vietnam, offering the equivalent of $ 300 a monthwhen for the same job in Shenzhen, China, they need it more than double. Some sources have reported that Google is interested in following the same path, from China to Vietnam, for the production of at least half of the Pixel 7s that will see the light in October.

Getting completely free from Beijing is no easy matter. The most complex objects to produce as the folding ones require skilled labor, difficult to find outside of China. That’s why, according to the NYT, Google will stay in and around Shenzhen for its first leaflet. Matter of time?