If Apple declines, the West declines: China is turning from a supplier to western companies into a direct competitor

The Spectator ^ | 04/16/2024 | Matthew Lynn

[SeekAndFind]

It has been a long time since the West dominated shipbuilding or steel making. We are already aware that we are losing ground in consumer goods, as well as in finance and transport. Add it all up, and we no longer expect the US, Europe or its allies to control the global market in most major industries. Still, even as other industries lost ground there was one thing most economists and industrial experts would have felt sure we could rely on: Apple. Whatever else happened, nothing would knock its world-beating iPhone — without question the world’s most profitable product — off its well-secured perch. But hold on. Apple’s market share is now falling at an accelerating pace, and its Chinese rivals are rising fast.

According to figures out on Monday, Apple is no longer the world’s biggest manufacturer of smartphones, after a steep fall in sales in the first quarter of the year. Apple took only 17 percent of the market in 2024 so far, compared with 20 percent for its great rival Samsung.

But it was the rising share recorded by its newer Chinese rivals that was more eye-catching, with Xiaomi, the country’s leading domestic brand, taking third place, with almost 15 percent of the market, not far behind Apple, and with a revived Huawei also making big gains.

With the CCP clamping down on Apple’s access to the vast Chinese market (hardly surprisingly given the protectionism of the Biden administration), that will continue for the rest of this year and beyond.

For the last twenty years Apple owned the market for high-end smartphones, with Samsung, running Google software, in second place. China’s rise in smartphones, however, is a snapshot of what is already happening in many other industries. In automobiles, with electric vehicles as a way into the market, China is now the world’s largest exporter, with plenty more brands entering the market (including Xiaomi, fast becoming a household name).

It is starting to happen in microchips, as China is forced by American technology bans to make its own semiconductors; in pharmaceuticals; and it may happen in aerospace very soon as well, with the Chinese-made Comac C919 passenger plane already operational and set to take market share from an increasingly troubled Boeing.

In reality, China is turning from a supplier to western companies into a direct competitor. The days when western companies could use cheap Chinese components, and its hyper-competitive factories, to lower their costs and fatten their profit margins are long over.

Instead, they face increasingly brutal competition from aggressive, well run Chinese rivals — now moving into mainstream consumer markets. Even the mighty Apple may not be strong enough to withstand the onslaught. If Apple loses the economic war with China, so will the West and right now its prospects are not looking good.

[politicket]

China is simply a factory nation - and it’s one on the precipice of economic disaster as more companies leave for Vietnam and other locations.

[kabar]

China thru stolen IP and forced technology transfer is becoming a monopoly in key industries that will supplant its rivals. China is now the largest automaker on the planet by a lot. They are developing their own commercial aircraft industry. They are the largest manufacturers of steel and aluminum. The list goes on and on.

The Chinese can undercut its rivals with cheaper prices subsidized by the government. They dominate international trade.

[Theoria]

All the free traitors wanted communist china into their circle of destruction. They got it, now we are living with those consequences. The free traitors love shipping jobs from America to china. Yet they always attack and criticize America instead of China. Kudlow, Musk, Limbaugh, Cook, Jobs, all loved having jobs in China producing products to be shipped back into America.

[Zhang Fei]

In unit terms, Apple and Samsung continue to command about 40% of worldwide market share.

In revenue terms, they may be 2/3. And profit-wise, they might be 90%. It's a gruelling treadmill, but so long as they plow those profits into making better products, Chinese makes will continue playing catch-up.

Re EVs, unless the Chinese makes have the means to ramp up an extensive national charger network from scratch, how will customers charge their vehicles during long road trips? The thing with Tesla's extensive charging network is it transforms Teslas from sporty-looking golf carts into vehicles in which owners can theoretically do the Great American Road Trip. Few will spend tens of thousands on glorified Chinese golf carts.

[politicket]

They dominate international trade.

The are still very much a factory nation.

Add to that one with a crashing real-estate market.

Add to that a yuan that is getting out of control.

Their economy is in a complete shambles.

[Sgt_Schultze]

US companies literally have China their tech and their tooling. Who didn’t see this coming?

[kabar]

Using the PPP metric, China is the world’s largest economy. A failing Chinese economy will have global repercussions, including on the U.S. China has replaced the U.S. as the engine of the global economy.

[existentially_kuffer]

More stealing from USA?

[Mr. Jeeves]

…with the Chinese-made Comac C919 passenger plane already operational and set to take market share from an increasingly troubled Boeing.

China is doing well in some areas but not commercial aviation. The C919 is a near-clone of the Airbus A320 and requires many Western-made parts - including engines - to build. And with all of its problems it can barely be considered operational at this point.

Phones? sure. Apple is going to have a hard time keeping its price points as high as they are going forward.

[politicket]

A failing Chinese economy will have global repercussions

Exactly - they are the first domino in the global recession we all face over the next decade.

[TwelveOfTwenty]

US companies literally have China their tech and their tooling. Who didn’t see this coming?

The free traitors, many of whom were Republicans and Freepers.

[ckilmer]

My guess would be that most of the people who work at china’s best cell phone companies —once worked for apple.

they the walked and took the ip with them.

[PIF]

With the CCP clamping down on Apple’s access to the vast Chinese market (hardly surprisingly given the protectionism of the Biden administration), that will continue for the rest of this year and beyond.

—
Overlooked or omitted in such analysis is the “let it rot” movement by young people where all that is cheap is in, like flip phones, leftover restaurant food, wearing PJs as daily garb, etc. The cheaper the better. Expensive phones of any brand are out.

[dfwgator]

(hardly surprisingly given the protectionism of the Biden administration)

Is this guy for real?

[bobcat62]

Guest workers who took the IP with them?

[Zhang Fei]

[Using the PPP metric, China is the world’s largest economy. A failing Chinese economy will have global repercussions, including on the U.S. China has replaced the U.S. as the engine of the global economy.]

---

PPP is a coping mechanism for poor countries. It was used to show us how the decrepit Russian empire under the hammer and sickle was really massive and within striking distance of the US. Then it fell apart and the Russian economy, the most dynamic part of the empire, with half its population, remains at 6% of the US economy 30 years after it adopted a semblance of a market economy. PPP is a shining example of how, when you start throwing in fudge factors, garbage numbers are the inevitable result. The real bottom line is gas stations only take exchange rate, not PPP, dollars.

[kabar]

https://www.cia.gov/the-world-factbook/field/real-gdp-purchasing-power-parity/country-comparison

The CIA Factbook uses PPP.

Real GDP (purchasing power parity)

GDP (purchasing power parity) compares the gross domestic product (GDP) or value of all final goods and services produced within a nation in a given year. A nation’s GDP at purchasing power parity (PPP) exchange rates is the sum value of all goods and services produced in the country valued at prices prevailing in the United States.

[Sirius Lee]

If folks want to purchase a chinese phone with whatever Easter Eggs might be inside, far be it from me to tell them they can’t.