What Apple Has to Fear from China

But Cook couldn’t assuage fears about the biggest reason for the revenue decline: a twenty-six-per-cent drop in sales in China, Taiwan, and Hong Kong, accounting for fifty-eight per cent of the over-all decline in Apple’s growth.

.. China is enormously important to Apple and other tech companies right now. The country’s billion-plus consumers represent a tremendous opportunity for growth. When China’s economy slows, as it has recently, Apple’s revenues are inevitably hurt.

.. China views the proliferation of Western, and especially U.S., technology as a stealth attempt to assert American economic and political power at its expense. Through that lens, blocking Western content and Western companies is an act of national defense. It is also a challenge to the notion of a liberating and open Internet, and China, in particular, has tried to build a wall around its citizens, not only via censorship and surveillance but by acting to limit the influence of foreign companies and organizations that might undermine Communist Party control.

.. The pace at which China is building its walled-off world, filled with hardware and software created by Chinese companies, with only selectively allowed non-Chinese content, is accelerating.

How the iPhone widens the US trade deficit with China

An interesting hypothetical scenario is one where Apple had all iPhones assembled in the US. Assuming that the wage of American workers is ten times as high as those of their Chinese counterparts, the total assembly cost would rise to $68 and total manufacturing cost would be pushed to approximately $240. Selling iPhones assembled by American workers at $500 per unit would still leave a 50% profit margin for Apple.

In the Apple Case, a Debate Over Data Hits Home

A Wall Street Journal/NBC News survey released last week found that 42 percent of Americans believed Apple should cooperate with law enforcement officials to help them gain access to the locked phone, while 47 percent said Apple should not cooperate. Asked to weigh the need to monitor terrorists against the threat of violating privacy rights, the country was almost equally split, the survey found.

.. A CNN poll the same month found that 45 percent of Americans were somewhat or very worried that they or someone in their family would become a victim of terrorism.

.. Now, people are beginning to understand that their smartphones are just the beginning. Smart televisions, Google cars, Nest thermostats and web-enabled Barbie dolls are next.

.. Officials had hoped the Apple case involving a terrorist’s iPhone would rally the public behind what they see as the need to have some access to information on smartphones. But many in the administration have begun to suspect that the F.B.I. and the Justice Department may have made a major strategic error by pushing the case into the public consciousness.