Apple Asks U.S. for Import Tariff Exemption on Parts for New Mac Pro After Shifting Assembly to China

Apple has asked the Trump administration to exclude components for the new Mac Pro and various accessories like the Magic Mouse and Magic Trackpad from being subject to a 25 percent tariff on Chinese imports, according to filings with the Office of the U.S. Trade Representative uncovered by Bloomberg.


The administration has promised relief if companies can show that parts or products can only be obtained in China, among other factors, according to the report. In all of its exclusion requests (search for Apple), Apple indicates that "there are no other sources for this proprietary, Apple-designed component."

The new Mac Pro will be assembled by contract manufacturer Quanta Computer in China, according to The Wall Street Journal. The current Mac Pro, released in 2013, has been assembled in Texas since its release and is Apple's only major hardware product manufactured in the United States.

Last month, an Apple spokesperson said "final assembly is only one part of the manufacturing process," adding that the new Mac Pro is designed and engineered in the United States and includes some U.S.-made components.

Trump's administration has threatened to impose another $300 billion in tariffs on Chinese imports, which would impact nearly every Apple product, but it has so far held off. In a recent letter, Apple warned that these tariffs would reduce its economic contributions and threaten its global competitiveness.

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Tag: China
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Apple Opens App Design and Development Accelerator in Shanghai

Apple has announced the opening of a new Design and Development Accelerator in Shanghai as part of an effort to support engineering talent and boost growth in China's iOS developer community.


Located in Pudong District, the Accelerator is being launched to give Chinese developers a chance to work closely with Apple experts to enhance their app development skills, learn how to take advantage of the latest Apple software and hardware, and get tips on app marketing and distribution.
"Developers here in China are leading the world with some of the most popular apps on the App Store, and we are proud to be providing this additional support for them," said Enwei Xie, Apple’s head of developer relations, Greater China. "From education to health to entertainment, the innovation we see here is incredible and we can't wait to see what these talented developers will come up with next."
The first Accelerator program focused on how to implement Apple's augmented reality technologies, with an in-depth look at the latest updates to ARKit 3, AR Quick Look, Reality Composer, and RealityKit. According to Apple, the range of activities includes lectures, workshops, labs, guest speakers, train the trainers, and networking on a regular basis.


Apple says Greater China has over 2.5 million app developers, and since 2010, local developers have earned over 200 billion RMB through App Store sales, with over 30 percent of those earnings made in the past year alone.

Shanghai's Accelerator follows a similar scheme Apple launched in 2017 in Bangalore, India. To attend programs, attendees must be registered members of the Apple Development Program and have an Apple ID registered in the region.

Tag: China

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Apple Reportedly Plans to Launch iPhone With Under-Display Fingerprint Sensor in China

Apple intends to launch a new iPhone for the budget-conscious Chinese market that features an under-display fingerprint sensor instead of expensive Face ID technology, Chinese media sources have claimed.

According to English-language Chinese media outlet The Global Times, Apple will release the new "tailored iPhone" in the country to arrest declining sales in the domestic market, which have been worsened by cost pressures from the 18-month long trade war between the U.S and China.

The new phone will reportedly remove Face ID, the facial recognition system for the iPhone, and instead employ an under-display fingerprint function, news site caijing.com.cn reported, citing sources on the upstream industry supply chain. An industry insider revealed that this is likely to "save on costs."

A structured light laser emitter, the major component of Face ID, would cost several hundred yuan, said a Beijing-based representative who preferred to be anonymous. He told the Global Times on Monday that "only Apple can afford it but that would also affect its sales."
Apple has effaced fingerprint recognition entirely in its flagship smartphone lineup, which includes the iPhone XS, iPhone XS Max, and LCD-based iPhone XR. All have a notch at the top of the screen housing the TrueDepth sensing camera in lieu of a Home button, which contained Touch ID's focused capacitive drive ring in earlier iPhones.

Apple was widely rumored to be attempting to integrate Touch ID under the display on 2017's iPhone X, but the company ditched any form of fingerprint scanning after hitting "early line of sight" with Face ID. Chinese smartphone brands like Huawei, Xiaomi, Oppo and Vivo have since gone in the opposite direction and extended the adoption of in-display fingerprint sensing technology from their premium smartphones to mid-range models.

The increased use of fingerprint scanners in smartphone screens is also reportedly being driven by a reduction in sensor prices and the price gap between OLED and LCD panels. This strategy adopted by domestic brands appears to have paid off, with Apple losing many Chinese users who prefer smartphones priced at around 5,000 yuan ($731), which has resulted in an increase in purchases of local brands, according to Monday's report.

Despite the market shift to fingerprint sensing tech, many observers believe Apple is done with Touch ID in smartphones, although the company has explored various in-display fingerprint scanner solutions in the past, including fingerprint sensing MicroLED displays. Touch ID has also found a new lease of life on laptop keyboards, specifically in Apple's MacBook Pro with Touch Bar range and the latest MacBook Air.

Notably, following meetings with suppliers in Apple's Asian supply chain in May, Barclays analysts claimed that 2020 model iPhones will have acoustic fingerprint technology that could allow for full-screen Touch ID.

Regardless, news of Apple's declining sales in China contrasts with the company's most recent earnings results. CEO Tim Cook said in April that performance in China had improved over the previous quarter, thanks in part to a sales tax cut in the country that allowed Apple to decrease the price of its products, and a "much better tone" in the China-U.S. trade relationship.

Tag: China

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Apple’s New Mac Pro Won’t Be ‘Made in USA’ as Production Reportedly Moving to China

While the current Mac Pro has been manufactured in Texas since it was released in 2013, The Wall Street Journal reports that the new Mac Pro unveiled earlier this month will be assembled by Quanta Computer in China.


Quanta is said to be ramping up production of the new Mac Pro at a factory near Shanghai, and given lower wages and closer proximity to other Apple suppliers in Asia, the Chinese manufacturing is expected to cost Apple less than it would to make the computer in the United States.

Quanta already assembles some Apple products, including the Apple Watch. The shift to Chinese manufacturing would allow Apple to avoid many of the issues its U.S. suppliers have faced in assembling the Mac Pro stateside.

Here's a video of how the current Mac Pro is made in the United States:


In a statement, an Apple spokesperson said "final assembly is only one part of the manufacturing process," adding that the new Mac Pro is designed and engineered in the United States and includes some U.S.-made components.

As a high-end, powerful workstation for professionals, the Mac Pro is not a high volume product for Apple, but where it is manufactured is notable given the ongoing trade war between the United States and China. President Donald Trump has urged U.S. companies to manufacture products domestically.

Trump's administration has increased tariffs to 25 percent on $200 billion of Chinese imports and he has threatened to impose tariffs on $300 billion more goods, including many Apple products. Apple has warned that these tariffs would reduce its economic contributions and threaten its global competitiveness.

The all-new Mac Pro is an absolute powerhouse with up to 28-core Intel Xeon processors, up to 1.5TB of ECC RAM, up to 4TB of SSD storage, up to AMD Radeon Pro Vega II Duo graphics with 64GB of HBM2 memory, and eight PCIe expansion slots for maximum performance, expansion, and configurability.

The new design includes a stainless steel frame with smooth handles and an aluminum housing that lifts off for 360-degree access to the entire system. The housing features a unique lattice pattern to maximize airflow.

Apple says the new Mac Pro will be released in the fall, starting at $5,999.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

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Tags: China, Quanta
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Apple Says Trump’s Tariffs Will Reduce Its Economic Contributions and Global Competitiveness

Apple has urged the Trump administration not to proceed with tariffs of up to 25 percent on a fourth set of goods imported from China, which would impact nearly all of its products, including the iPhone, iPad, Mac, Apple Watch, Apple TV, AirPods, Beats, HomePod, batteries, repair parts, and more.


In a letter sent to United States Trade Representative Robert Lighthizer [PDF] this week, Apple warned that the tariffs would reduce the company's contributions to the U.S. economy and weigh on its global competitiveness:
U.S. tariffs on Apple's products would result in a reduction of Apple's U.S. economic contribution.

U.S. tariffs would also weigh on Apple's global competitiveness. The Chinese producers we compete with in global markets do not have a significant presence in the U.S. market, and so would not be impacted by U.S. tariffs. Neither would our other major non-U.S. competitors. A U.S. tariff would, therefore, tilt the playing field in favor of our global competitors.

We urge you not to proceed with these tariffs. Thank you for your consideration of our comments.
Apple outlined many of its economic contributions in the letter, referring to itself as a "proud U.S. company" that is both the largest corporate taxpayer and one of the largest job creators in the country:
Apple is a proud U.S. company and one of the largest job creators in the United States. We are responsible for over 2 million jobs across all 50 states, including Apple's direct employees, employees at our manufacturing and retail partners, and Americans who make their living in the vibrant and growing app economy.

In 2018, after the passage of tax reform in the U.S., we announced our intention to make a total direct contribution to the U.S. economy of over $350 billion over 5 years and we are pleased to report that we are on track to achieve this contribution. We are opening several new sites and adding new jobs to our U.S. employee base.

Apple is also the largest U.S. corporate taxpayer to the U.S. Treasury and pays billions more each year in local property, sales, and employee taxes.

Finally, Apple's products are used by American families, students, businesses, government agencies, schools, and hospitals to communicate, teach, improve health outcomes, and enhance creativity and enterprise.
Last month, analysts at investment bank J.P. Morgan estimated that the tariffs could result in a 14 percent increase in the retail price of an iPhone XS, pushing the cost of the device from $999 to $1,142. However, the company could also choose to absorb the impact of the tariffs on a temporary basis.

The letter was earlier reported by CNBC.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.


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Apple Reportedly Considering Moving Up to 30% of Production Out of China to Diversify Supply Chain

With the U.S.-China trade war seemingly showing no signs of slowing down, a new report claims that Apple is getting serious about diversifying its supply chain in an effort to reduce its reliance on Chinese manufacturing.

iPhone disassembly robot Daisy

Specifically, Apple has asked several of its major suppliers to evaluate the cost implications of shifting 15 to 30 percent of their production capacity from China to Southeast Asia countries as it prepares for a "fundamental restructuring of its supply chain," according to the Nikkei Asian Review.
Key iPhone assemblers Foxconn, Pegatron, Wistron, major MacBook maker Quanta Computer, iPad maker, Compal Electronics, and AirPods makers Inventec, Luxshare-ICT and Goertek all have been asked to evaluate options outside of China, multiple sources say. Many other Apple suppliers such as print circuit board and casing providers are closely monitoring where these major assemblers would shift their production.
The countries being considered for diversification include Mexico, India, Vietnam, Indonesia, and Malaysia, with India and Vietnam among the favorites for iPhone assembly, according to the report. Apple supplier Wistron already assembles a limited quantity of iPhones in India.

As part of the efforts, Apple reportedly has a so-called "capital expense studies team" tasked with negotiating with suppliers and governments.

While these plans are said to have been triggered by the trade war, the report claims that Apple has decided the risks of relying so heavily on manufacturing in China are "too great and even rising" even if the trade war is eventually resolved.
"A lower birthrate, higher labor costs and the risk of overly centralizing its production in one country. These adverse factors are not going anywhere," said one executive with knowledge of the situation. "With or without the final round of the $300 billion tariff, Apple is following the big trend [to diversify production]," giving itself more flexibility, the person added.
Apple currently relies on Chinese and Taiwanese companies for the vast majority of its manufacturing needs, so diversifying its supply chain would obviously take time. The report cites a source who believes it would take at least 18 months for production to begin in new locations.

Tags: China, Foxconn

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Apple CEO Tim Cook Says Performance in China Has Improved Over Previous Quarter

Apple today announced its earnings results for the second fiscal quarter (first calendar quarter) of 2019, and ahead of the company's upcoming earnings call, Apple CEO Tim Cook shared some remarks on Apple's results with CNBC.

According to Cook, Apple's performance in China improved over the previous quarter and saw greater strength towards the end of the quarter.


A sales tax cut in the country decreased the price of Apple products, and Apple also made its own pricing adjustments in the country. Cook also told CNBC that the trade relationship between the U.S. and China had improved, resulting in a "much better" tone.
"The tone is much better than it was in the November-December timeframe. I think that affects consumer confidence in a very positive way," Cook said.
Apple had $10.22 billion in sales in its Greater China category, which includes Taiwan and Hong Kong.

During the quarterly earnings call, Cook said that while worldwide revenue was down 17 percent, declines were smaller in the final weeks of the March quarter. Apple says that November and December were the most challenging months, which is an encouraging trend.

Apple reported revenue of $58.02 billion and earnings per share of $2.46. Apple's guidance for the third fiscal quarter of 2019 is $52.5 to $54.5 billion, higher than analyst expectations and an indication that iPhone sales in China are stabilizing.


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Apple’s iPhone Sales in China Down an Estimated 30% in Q1 2019, Huawei Continues to Dominate

Apple's iPhone sales in China were down 30 percent during the first quarter of 2019, according to new shipment estimates shared today by Canalys.

Apple shipped an estimated 6.5 million iPhones during the quarter, marking its worst decline in two years. It shipped fewer smartphones in the country than Chinese vendors Xiaomi, Vivo, Oppo, and Huawei, coming in as the number five brand in China.


Huawei, the top vendor in China during Q1 2019, shipped 29.9 million smartphones for 34 percent market share. Huawei saw impressive growth during the quarter, with smartphone sales up 41 percent. Other smartphone vendors in China also saw drops in smartphone sales, though not as dramatic as Apple's decline.


Apple held just 7.4 percent market share in China during Q1 2019, down from 10.2 percent in the year-ago quarter. According to Canalys analyst Mo Jia, introducing features like 5G is "vital" to prevent iPhone demand in China from shrinking even further.
Apple's performance in China is concerning, given that the worst quarter for iPhone shipments is usually Q2 or Q3, not Q1 when new devices are still fresh. Apple has acted to cut iPhone retail prices, which has largely relieved the pressure from its channel partners. Despite the iPhone's installed base in China being well over 300 million, it is vital that Apple prevents users deserting it for Android vendors. Apple faces a challenge in China to localize its software and services offerings as quickly as in Western markets. Its hardware is therefore more exposed to competition in China than elsewhere. Bringing up-to-date features, such as 5G, next year, as well as localized software is vital to prevent demand shrinking further.
Overall smartphone shipments in China fell to 88 million units, the market's worst performance since 2013 and a three percent drop from the year-ago quarter. Huawei managed significant growth in China through increased investments in brick and mortar stores, a wider offering of consumer IoT devices, and penetration of rural markets with low cost smartphones.


Apple is set to announce its earnings results for the second fiscal quarter of 2019 (first calendar quarter) this afternoon. Apple is expecting revenue between $55 billion and $59 billion, a decline from the $61.1 billion reported in 2018.

Apple is no longer disclosing iPhone, iPad, and Mac sales, which means there is no longer access to specific sales data to confirm analyst estimates.

Tags: China, Canalys

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Apple Lowers Prices of iPhones, iPads, Macs, AirPods, and More in China as VAT Cut Takes Effect

Apple has lowered the prices of several products in China this week, including the latest iPhones, iPads, and AirPods.


As noted by CNBC, the iPhone XR now starts at 6199 RMB on Apple's online store in China, nearly five percent lower than its previous 6499 RMB price tag. The higher-end iPhone XS and iPhone XS Max models each received a 500 RMB price cut as well and now start at 8,199 RMB and 9,099 RMB respectively.

Likewise, the second-generation AirPods with the standard Lightning charging case now start at 1,246 RMB, down slightly from 1,279 RMB, and the 11-inch iPad Pro has been discounted to 6,331 RMB from 6,499 RMB previously.

The price cuts appear to be due in part to a reduction in China's value-added tax (VAT) that went into effect today to help boost the economy there, but regardless of the reason, any price cut could be good news for Apple as it seeks to bolster sales in China.

Last quarter, Apple issued its first revenue warning in 16 years due to "fewer iPhone upgrades" than it anticipated and "significantly greater" than expected economic weakness in the Greater China region. Apple already discounted iPhone prices at third-party resellers in China to improve results.

Tag: China

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Tim Cook Travels to China, Meets With Vice Premier and Developers

Apple CEO Tim Cook is in China this week ahead of the annual China Development Forum that promotes economic growth in the country.


Cook was photographed at an Apple Store in Beijing's central Wangfujing shopping district on Thursday, where he attended a music-related Today at Apple session. On Friday, Cook met with developers and visited the Palace Museum, which has an ARKit-based app that offers tourists an immersive experience.

Later on Friday, Cook met with politician Sun Chunlan, a Vice Premier of the People's Republic of China. The state-run news agency Xinhua claims that Sun made positive remarks about Apple and the company's role in Sino-U.S. relations.


Cook, who has shared pictures of his trip on Weibo, is reportedly set to attend the annual China Development Forum in Beijing on Saturday. Cook co-chaired the event in 2018, calling for stronger data privacy regulations in the wake of the major Facebook and Cambridge Analytica data scandal.

Cook will then likely take a direct flight back to California in time for Apple's media event on Monday at Steve Jobs Theater, where the company is widely expected to introduce two new services for streaming video and magazines/newspapers.


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