In the claws of the dragon: how relations with China became a burden for Apple

In 2007, Apple launched the first iPhone on the market and was ranked second on the Supply Chain Top 25, an annual list of the most successful companies in terms of building supply chains. “Everyone was shocked,” recalls logistics analyst Kevin O'Mara. In the next seven years, Apple did not leave the first place in the ranking, during which time it became the most valuable company in the world and built a unique system of production and supply in China.

As a result, the corporation was “tied” to Beijing and became dependent on the state, which, under the current HEAD Xi Jinping, is becoming more and more authoritarian and moving away from Western countries. At the same time, the geopolitical confrontation between China and the United States intensified in 2022, and Apple is criticized by politicians and investors.

In China, the corporation produces more than 95% of the iPhone, AirPods, Mac and iPad, where Apple receives about 20% of its revenue ($74 billion in 2022).

Now the company is trying to sever its burdensome close relationship with Beijing, Washington's main geopolitical adversary. But it turned out to be almost impossible to do so. How Apple is distancing itself from China  and what risks the company, whose capitalization exceeds $2.2 trillion, tells The Financial Times.