"It was a very stupid decision for Apple to migrate the ** chain to the Indian market". In May last year, Warren Buffett's criticism of Apple's chain transfer was still in his ears, but Apple's chain transfer was still carried out quietly, and he took Foxconn and other partners to transfer the chain together.
It is reported that at present, among Apple's ** chain partners, the largest investment in India is still Terry Gou's Hon Hai Group. In addition to continuing to expand iPhone assembly capacity, Hon Hai also continues to set up related component factories in India to gradually build a complete chain.
Source: BBC).
On February 6, Hon Hai announced that its Indian subsidiary would invest 12 billion Indian rupees (about 10.).400 million yuan) to build its own factory, activelyExpanded production capacity for Apple in India. November 27, 2023On behalf of its Indian subsidiary, Hon Hai Group announced that it will invest 12820.9 billion rupees (about 11 billion yuan) to build a new plant.
Foreign media predict that by the end of 2024, Apple's production ratio in India will increase to 20%, which also means that Apple's production capacity will be further transferred from China to India. In the future, there may be Indian-made iPhones sold in China. However, Warren Buffett no longer seems to value Apple's commercial value.
On February 14, Reuters reported that Buffett's company, Berkshire Hathaway, **10 million shares of Apple**, worth $2 billion (about 14.3 billion yuan). Apple's market capitalization reached $3 trillion on January 22 this year, but by February 21, Apple's market capitalization had fallen to $282 trillion dollars. It shrank by $180 billion a month (about 1.).3 trillion yuan).
Apple's Q1 2024 earnings report showed that Apple's mobile phone sales in China fell by 13%. And Apple's actual iPhone sales were $5 billion, lower than Wall Street's expectations of $6 billion due to declining sales in the Chinese market.
Source: Foreign media).
Apple's overall fiscal Q1 sales and profit fell short of analysts' targets, resulting in Apple's stock price trading in after-hours trading** 3%.
China is Apple's third-largest market. Apple CEO Tim Cook said in an interview with Reuters:"China is the most competitive smartphone market in the world. ”
But analysts have expressed concern about Apple's growth in China, where the market is buying more Huawei phones. The latest data shows that Huawei mobile phones have made a strong comeback with the first sales volume in the first two weeks of 2024.
In the highly competitive Chinese market, Apple has had a very good start, occupying the top spot in the high-end model list for many years. However, Apple's first-chain transfer in recent years has slowly pulled Apple off the altar, and Huawei has also revitalized at this time.
The 8th issue of "Who is decoupling from China" will take you to see Apple's **chain transfer and Huawei**chain's revitalization.
In the first seven months of fiscal 2024 (April 2023 to October 2023), Apple exported more than $5 billion worth of iPhones from India, up 177% year-over-year. In volume terms, the company's share of India's smartphone exports grew from 9% in April-June 2022 to nearly 50% in the second quarter of 2023, surpassing South Korea's Samsung and China's Xiaomi, once India's largest mobile phone brand, to become India's largest smartphone exporter.
Apple expects to increase iPhone production in India to 50 million units in the next 3-4 years. According to Wall Street, this would account for one-third of Apple's global production. As India becomes the largest user of smartphones and a country with rapid digital development, production will increase by tens of thousands.
Source: The New York Times).
1.Battery ** chain transfer India
In December 2023, Apple wanted batteries for its latest generation of iPhones to be produced in India as part of Apple's efforts to diversify its global ** chain and move manufacturing operations out of China. It's also Apple's latest move.
People familiar with the matter saidBattery makers such as China's Desay have been encouraged to set up new factories in India, while Apple's Taiwanese battery maker Xinpu Technology has been asked to expand production in India to cope with future orders.
In addition, an India** minister said,Apple's Japanese merchant, TDK, is building a 180-acre factory in Manisar, Haryana, to produce batteries for Indian-made iPhones.
But in the past year, India has only allowed Apple's Chinese parts dealers to do business after finding a local joint venture partner.
According to the Financial Times, India** and industry insiders saidDesay, a Chinese company that has been ** iPhone batteries for years, may face hurdles when it seeks to build a new factory in India.
Is this a disguised attempt to exclimate Chinese companies from Apple's ** chain?
2.* Chain turned to Vietnam and Thailand
Laptop production turns to Thailand.
In June 2023, Taiwanese newspaper Economic **, citing industry sources, reported that Chinese mainland may transfer production of MacBook laptops to Thailand for the first time.
According to the newspaper,Ruiyi Optoelectronics will be the backlight module manufacturer, while Quanta and Foxconn will assemble the newly released MacBook models in Thailand, rather than China, which has been the exclusive production base for MacBooks for many years.
According to Nikkei Asia, it was reported in April that Apple was discussing with contractors the possibility of assembling and producing some of the components and modules of the laptop in Thailand. According to the report, Apple has been producing the Apple Watch in Thailand for more than a year.
iPad and Apple Watch chain Vietnam.
In December 2023, Luxshare Precision, another major Apple competitor, failed to obtain approval from India for its expansion plans, and instead announced that it would spend 3$300 million for expansion in Vietnam.
And earlier in June, Compal Electronics, the main manufacturer of iPads and Apple Watches, saidThe company secured $30 million worth of land in Vietnam to build a new plant "to expand capacity."
At the same time, Compal said in a ** exchange document,The Vietnamese subsidiary of the Taiwanese company leased a 40-hectare plot of land in Lien Ha Thai Industrial Park in Binh Binh Province.
In May 2023, according to the latest list of **chains announced by Apple, the speed of its transfer of **chains is accelerating.
The list is displayedThe number of production sites in India increased from 11 in 2021 to 14 in 2022; The number of factories in Thailand increased from 22 in 2021 to 28 in 2022; The number of facilities in Vietnam remained unchanged at 27 during this period.
For Chinese companies, 10 Chinese companies were newly included in the fruit chain (including 5 Taiwanese companies), and 8 Chinese mainland companies were excluded from the fruit chain.
For companies that can be on the list of "fruit chains", it can mean that their core is recognized by Apple, and Apple has very strict requirements for its ** chain enterprises. However, sometimes "success is also the fruit chain, failure is also the fruit chain", and the heavy dependence on Apple will gradually lose its pricing power, and even the performance will plummet after being excluded from the fruit chain. For example, "the first brother of the fruit chain" Lixun Precision, Goertek, and OFILM.
Luxshare Precision, which was cut off the chain:Since 2011, he has joined the fruit chain and obtained the OEM business of iPad cables, AirPods and iPhones. By 2021, Apple's orders accounted for 74% of Luxshare Precision's revenue09%, Lixun Precision's sales revenue from the largest customer, Apple, reached 11405.6 billion yuan, correspondingly, the revenue from the second largest customer is only a fraction of Apple's 503.4 billion yuan.
But in 2023, when Apple announced that it was going to cut its business in China, the stock price of Luxshare Precision fell sharply. Wind shows that from November 9, 2022 to January 13, 2023, the market value of Lixun Precision shrank by about 16.4 billion.
Goertek shares that were cut off:In 2022, Goertek will be cut by Apple, and affected by this, Goertek's operating income in 2022 is expected to decrease by no more than 3.3 billion yuan, and the related direct loss will be about 900 million yuan (including direct profit reduction and shutdown losses).
Excluded OFILM:Oufeiguang is the most representative enterprise. In March 2020, OFILM was removed from the list of ** chains by Apple, and 27The asset impairment loss of 700 million yuan, of which the asset impairment loss of Apple-related businesses is as high as 25800 million yuan, accounting for 9304%。OFILM's net profit attributable to the parent company also increased from 5 in 20191 billion yuan turned into -194.5 billion yuan.
In 2021, the company's net profit attributable to the parent company was -262.5 billion yuan, and the operating income in the first half of 2022 will be about 777.5 billion yuan, a year-on-year decrease of 3378%；The corresponding attributable net profit realized is about -87.4 billion yuan, a year-on-year decrease of 267773%。OFILM's market capitalization increased from 423 on January 1, 20202.1 billion yuan, which has also fallen to the current (January 13, 2023**) 1596.3 billion yuan, and the stock price also fell by 6860%。
But there is no doubt that Apple's mobile phones are still selling well around the world.
According to Apple's financial report released on February 1, Apple's revenue in the first fiscal quarter was higher than expected, with revenue in Greater China falling by 13%, but sales growth in other regions.
But in Greater China, Cook also acknowledges that "China is the most competitive smartphone market in the world." ”
Source: Huawei's official website).
1.Huawei in the revival of the Mate 70 will be out
On January 30, Ming-Chi Kuo, an analyst at Tianfeng International, posted on the community **X (formerly known as Twitter Twitter) that according to the **chain survey,Apple has lowered its iPhone shipment plan for key upstream semiconductor components this year, which is expected to decrease by 15% from last year to around 200 million.
According to Ming-Chi Kuo's analysis, there are two reasons for the decline in iPhone shipments in 2024:The emergence of new designs for generative AI high-end phones and foldable models is influenced by the competition of Huawei in China, and folding phones are gradually becoming the first choice for high-end users to change their phones.
According to a research report released by Jefferies in October 2023, Huawei's market share in China is 2333%, in first place, Apple with 2221% came in second.
In the future, Huawei will release the Mate 70 series of phones to compete with the iPhone 17.
Interestingly, Huawei plans to schedule the launch of the Mate 70 series in September 2024, coinciding with the launch of the iPhone 16 series. This move is undoubtedly a direct challenge to Apple and shows Huawei's ambitions in the smartphone market.
2."Hualian" drives China's mobile phone chain
The rise of Huawei will once again drive the development of China's mobile phone chain enterprises. According to reports, after the Huawei Mate 60 Pro officially opened pre-sale, it was revealed that more than 90% of the parts came from China's local ** manufacturers, and 70 80 have been disclosed. In other words, more than 10,000 parts of Huawei's 5G mobile phone have been completely localized.
Although there is a certain proportion of Chinese parts for Apple mobile phones, the proportion of added value is very low.
Take OFILM, which was once abandoned by the "fruit chain", as an example. OFILM lost Apple, a major customer, and publicly apologized to the market. In this year, OFILM's revenue was "cut in half", falling by more than 50%; Profit**90%.
Cai Rongjun, chairman of OFILM, said in an interview with Yicai in mid-October:"Stubbornly live. But Huawei's rise has once again saved the business.
According to reports, in the ** chain of Huawei Mate 60 series mobile phones, OFILM's (front + rear) camera module and fingerprint recognition module occupy the vast majority of the share, and the value of a single mobile phone is between 500 600 yuan. According to data from other research institutions, if you add the orders of Huawei's P series mobile phones, OFILM's share of value in the Chinese chain is about 70% and 80%.
Finally, in the view, China needs to have its own enterprises to drive the domestic ** chain, which is the best guarantee for the safety of the upstream and downstream enterprises of the ** chain; However, the most advanced enterprises in the downstream of the chain should also expand the diversification of the first chain, and should not take a single company as their only reliance.
References:
1. apple iphone target is billions short of wall street's as china sales lag. reuters
2. warren buffett’s berkshire hathaway sells off some apple stock. cnn
3. apple moves towards india-made iphone batteries in push away from china. financial times
4.Apple's "exodus" is in progress: the struggle and survival of fruit chain enterprises. The Paper.
5.Abandoned by Apple, OFILM relied on the "Hualian" Jedi counterattack. China Entrepreneur Magazine.
Reading Tips:
The column "Who is decoupling from China" aims to analyze the behavior of decoupling and breaking the chain of China's ** chain due to political factors rather than market factors, and provide decision-making reference for industry ** chain cooperation. This column does not advocate the "decoupling and breaking of the chain" between the Eastern and Western chains, and advocates the orderly development of competition and cooperation in accordance with market rules. The essence of the chain is a win-win chain, and the chain without cooperation is destined to go far.
Editor: Binghe Li Yi.