During Tim Cook's decade as CEO, Apple has exploited global supply chains, achieved high market shares, made money in China and sidestepped tax bills. However, all of these trends are becoming less favourable
Even by the standards of other tech giants, Apple is unusual. It is older ; it mainly sells hardware; it is controlled by investors not founders; and it is more global, with a higher share of sales outside its home market than Alphabet, Amazon, Facebook, Microsoft, Alibaba or Tencent. Under Mr Cook’s supervision, it has exploited four trends. One is global supply chains: it has built an immense production network with China at the centre and components coming from around the world.
However, those four trends are becoming less favourable. Geopolitical tensions threaten global supply chains. President Xi Jinping’s authoritarian policies have dulled the attractions of relying on Chinese consumers for 18% of sales. His new slogan of “” may signal a desire to cut corporate profits. Western trustbusters are targeting tech, including those Google payments and Apple’s App Store, which Epic Games, the maker of “Fortnite”, accuses of levying excessive fees.
Yet on the two thorniest problems Mr Cook has not made up his mind. On supply chains, although Apple has shifted the mix of its own long-term assets to America—the share has risen from 38% in 2012 to 70% now—key suppliers including, a chip firm, are lukewarm about putting production there. If the Sino-American rift deepens, or Apple’s relations with Beijing sour, Mr Cook will need to pivot away from China, with momentous consequences for its margins and for world trade.
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