Here’s a quick review of Patrick McGee's new book as Chinese and US trade representatives meet in London, and Apple starts its WWDC event where there is lots of interest in its AI plans.
I have researched, advised and written a lot about offshoring (albeit more on the IT v product manufacturing side) and heard plenty of anecdotes about Apple’s supply chain global consolidation starting in the 90s, about Tim Cook, Terry Gou (of Foxconn) and Jony Ive’s drive and Apple’s unbelievable design prowess and quality at massive scale.
When I had reviewed Walter Isaacson’s book on Steve Jobs in 2011, I had written “I would have loved for him to have the started the book around 2000 and spent 3/4 of the book on the amazing string of Apple and Pixar achievements since then.” And “more on Apple’s retail stores, its Apps ecosystem. Did SJ ever worry about AT&T’s network problems with the iPhone? What did he think of Foxconn and its employee suicides and other labor issues as it assembled most of his iPods, iPhones and iPads?”
Patrick does and goes into obscure product and engineering details and names secondary and tertiary players. Which is impressive since Apple is notoriously secretive and the Chinese government even more so. The flip side - the proliferation of names and products may make the book a bit of a slog for many readers even if you are a lifetime Apple fanboy.
The overall theme is Apple, perhaps unwittingly, enabled technology transfer to China at an extraordinary scale and that it will be a herculean task to get away from China - either as a large market or a supply base, especially with growing trade tensions. I wish Patrick had spent more time on how China has leveraged the consumer electronics ecosystem into autos (he does have a section on Tesla in China, but no mention of the canceled, decade-long Apple Car project code named “Titan”) and industrial equipment and now into military tech. I also wish he had discussed how China will handle its growing population pyramid challenge (tracing back to its brutal one child policy).
Would have also been nice to hear about China’s AI trajectory and why in contrast, Apple has not delivered much on its AI promise. Or more of a comparison to the other Magnificent 7 competitors as a possible diversification strategy. And that he had spent more space on India as a buffer to China – which so far it has been slow due to “Cupertino’s caution and New Delhi’s unwillingness to be as welcoming as Beijing had been two decades earlier". Also, how recent tensions between India and Pakistan complicate dealing with China. As far as making in the US, there is an unflattering section about Flextronics assembling Mac Pros in Texas.
There is plenty of color in the book – literally. He describes “yellow cows” – China’s mafia and how they manipulated the “gray market” for early Apple devices in the country, the scary “white guards” with full body COVID suits, the “red supply chains” as domestic contract manufacturers and vendors gradually elbowed out the Koreans, Taiwanese and others. He does not mince words about either President Xi Jinping or Donald Trump and has zingers like “In China, ‘win-win’ means China wins twice”
As the US reindustrializes (with or without Apple making products here) I hope every HR, procurement, facilities, supply chain exec and state and local politician reads it. We need a next gen of work ethic, driven suppliers and speed of approvals, construction and utilities. You have to admire what China did in the three decades where it grew at 10% a year and pulled hundreds of millions out of abject poverty.
I also hope global leaders read it to try and match (realize that is a very tall order) Chinese speed and skill but just as importantly to understand the many risks of getting too close to China.
