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by amelius 1853 days ago
> Apple's weakness is now their precarious position in bed with China, which will take decades to undo.

But this holds for the entire world economy.

2 comments

Kind of, but among the largest tech companies, Apple uniquely runs most of its revenue through the hardware category, and gets a lot of revenue from China.

Google (Alphabet), Microsoft, Amazon, Facebook all use hardware from China, but most of their revenue comes through software interactions. Google does not officially even operate in China. Amazon has a limited corporate footprint in China.

I think it’s reasonable to say that Apple has higher risk related to China than many of its competitors.

> Google does not officially even operate in China

Google lists three offices in mainland China:

https://about.google/intl/ALL_us/locations/?region=asia-paci...

What happens to their services if they can’t procure hardware?
Services could be sold to existing customer with existing hardware at a moment.
Because hardware never fails and needs to be replaced…

You do remember the disruption when the earthquake in Japan caused hard drive failures? Can you imagine what would happen if the entire supply chain gets disrupted?

Of course finally service companies (or all companies) need hardware but the situation isn't too bad compared to company profited by selling hardware. BTW the HDD disaster was flooding in Thailand
As Werner Vogels says “everything fails all the time.” How long can Amazon Retail/AWS, Google/GCP/YouTube, or Microsoft survive without continuously replacing hardware? How much degradation of their service can they withstand as they are unable to replace hardware?

If hard drives fail at YouTube and they can’t replace them and keep up with demand, does YouTube start deleting old videos to make room for new ones? Does AWS stop promising 6 way redundancy across three data centers? When a server goes south in us-east-1 and they don’t have a replacement, then what?

Both Google and Facebook have substantial proportions of their revenue from CN based advertisers.
It's also in bed with the US, a huge flaw for us in China.

I mean, there are dark forces at the top here, which probably will misuse any kind of dominant position, but it's not like the US has our best interests at heart either.

As for Apple, now they have to play nice with a 300+ M people direct market in the US + all the allies they can sort of bully into segregation against us, vs a 1.3bn (and trending down) direct market in China + very few allies who'd be rich enough to afford Apple products.

I wouldn't blame Apple for cutting itself in half to work with both side of this artificial competition both our rulers decided they should have to defend our respective precious "national security" (which I'd rather call national distraction but heh).