How is Trump's anti-Chinese rhetoric playing out? 70% of smartphones sold in the US are – surprise – made in China
- Reference: 1597235411
- News link: https://www.theregister.co.uk/2020/08/12/usa_china_smartphones/
- Source link:
Venerable box counter Canalys said that figure is rising too: 60 per cent of the blowers sold to the good folk of America in Q1 were built in China but fast-forward to Q2 and the figure swells to 70 per cent.
"Tensions between the US and China have escalated in recent years, creating a perpetual state of uncertainty for all smartphone vendors except Samsung and LG," said Vincent Thielke, analyst at Canalys.
"The worsening relationship has resulted in extreme instability that has global onlookers eagerly awaiting November's presidential election. This may guide the US-China trade war into a new phase of détente – or reignite flare-ups."
He told us Americans were already used to buying goods that are mostly made in China. "Personally I don't see much of a difference between a smartphone that's 'made in China' or 'made in Vietnam'. I mainly care that my smartphone arrives quickly and works great out of the box."
America's largest phone brand, Apple's iPhone, uses certain components that are built in the US, but the device itself is assembled in China by Foxconn and Pegatron. Shortages emerged after [2]factories in China were closed earlier this year at the outbreak of the virus.
In the US, Apple grabbed market share in Q2, leaping to 47.1 per cent compared to 40.8 per cent a year earlier. This was on the back of a 10 per cent year-on-year spike in sales to 15 million in a total market that declined 5 per cent to 31.9 million. Apple shipped 15 per cent more iPhone 11s and the [3]mid-range SE came good too.
[4]Tim Apple , CEO of Apple, said the "SE launch" and "continued economic stimulus" helped it beef up sales in its Q3 of [5]fiscal '20 ended 27 June , when iPhone revenue grew 2 per cent to $26.4bn.
Samsung declined 1 per cent to 7.4 million phones, but it beat the US market average to net 23.2 per cent of sales. It shipped 59 per cent fewer Galaxy S20 5G and S10 models, and relied on the entry-level Galaxy A10e and A20 handsets.
South Korean rival LG shrank 19 per cent to 3.5 million units, Lenovo was up 8 per cent to 2.2 million, and TCL crashed 43 per cent to 1.3 million handsets. The also-rans in the "Others" section were collectively 34 per cent smaller than a year earlier, generating volumes of 2.4 million units.
The average price of a smartphone was $503, down 10 per cent, said Canalys. The Lifeline programme, subsidised by the US government, upped orders for "ultra low-end Android" devices from relative unknowns such as Unimax and Wiko.
"Greater unemployment has cut consumer choice, in some cases restricting the ability to buy a new device or cover phone-related expenses," said Thielke. "With economic challenges likely to persist, the sub-US $400 segment is poised to gain more prominence, particularly as Google and other Android players increase their exposure to the low-end and mid-range segments."
The adoption of 5G phones "failed to take off", he added, as "store closures and virus fears limited interaction" with demo models, and rising unemployment clipped households' discretionary spending: [6]47 million people filed for benefits in the US during the 14 weeks to late June.
Thielke said: "Tight consumer budgets further constrained spending power, and with scarce 5G network coverage in American suburbia, consumers saw plenty of reasons to buy a 4G device instead."
Smartphone sales in China were down 7 per cent in Q2 to 90.7 million. Huawei grew 8 per cent to 40.2 million, 10 times the volumes of Apple, which was the only foreign vendor among the top five of that market.
So despite Trump's [7]protectionism (or security fears) , trade tariffs, and not-so-gentle Sinophobia, American citizens are buying more and more Chinese-made phones, just as they are in China. ®
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[1] https://www.theregister.com/2020/07/15/huawei_uk_aftermath/
[2] https://www.theregister.com/2020/01/29/apple_coronavirus_supply/
[3] https://www.theregister.com/2020/04/15/apple_iphone_se_2020/
[4] https://www.theregister.com/2019/03/07/trump_occupational_surnames/
[5] https://www.theregister.com/2020/07/31/apple_q3_fy2020/
[6] https://www.theguardian.com/business/2020/jun/25/us-unemployment-figures-latest-coronavirus-pandemic-economy
[7] https://www.theregister.com/2020/05/16/huawei_chip_ban_latest/
[8] https://whitepapers.theregister.com/
> American citizens are buying more and more Chinese-made phones, just as they are in China.
Of course they are. They're largely being dumped below cost price and helped by an artificially lowered currency.
They're largely being dumped below cost price and helped by an artificially lowered currency.
I'm not completely convinced of that. But worth pointing out: there is a bit of a difference between Huawei as a phone network provider, and Huawei, Foxconn, etc. as manufacturers that build phones for the U.S. market. The biggest concern with Huawei's 5G network is similar to concerns regarding things like Tik Tok - having data and conversations for U.S. citizens routed through servers owned by Chinese companies that are OBLIGATED to cough up data for the Chinese Communist Party upon demand.
If the U.S. government did this for U.S. companies with U.K. data, you'd be mad. [they tried demanding data from Microsoft, but Microsoft actually stood up for customers, and so has Apple in its own way]. OK so the U.S. government has occasionally TRIED this sort of thing themselves, and that's the point. Our laws and courts kept them from being able to get away with it. Under COMMUNISM, that ain't gonna work.
I'd still like to see the phones made in the USA though. Not too far into the future, it may even happen with "lights out" factories. The only reason it doesn't happen now, is that the component and raw material supply lines have all (effectively) been "cornered" by... you guessed it... China.
How long?
Tensions between the US and China have escalated in recent years. Call it 3.5 years, we shouldn't discuss what happened then...
Re: How long?
Well, i doubt it will escalate for four more years....
The reason is exactly that...
... and the pandemic too showed we (Western countries) are too dependent on Chinese-made stuff.
As China became less and less reliable, especially since Xi became "president for life", something his predecessors didn't attempt, actually moving back and not forward, this is a big issue.
Re: The reason is exactly that...
Well, Deng was it in all but name, and he was perhaps shrewder: for all the talk of "Qi thought", it still looks very much like Deng's China.
Moral: don't mess with the president of bridge club!
It seems the article author is unwittingly proving Trump's point. If 70% of smartphones sold in the US were made in the US would that be a bad thing?
But hey "LoL @ tRuMp"
Well that depends, do you want to pay $5k for your next iPhone or $3k for your next Pixel?
I'm not convinced more expensive devices would be a bad thing. It would greatly slow down the environmentally damaging upgrade cycle, and would lead to a push to devices that are more repairable and supported with OS updates for longer.
Let's face it, at this point the actual practical advantages of a 2020 device over one from 3 years ago are minimal.
Then let him do something about it
If Trump have government loans or grants for factories to be tooled up in the USA, and then had other specific carrots to dangle to make sure American workers were hired, got US-made phones rolling off the conveyor belt, and then started closing off the Chinese pipelines, then there would be a choice.
People would object to their tax dollars being used to support/prop up an industry not viable unless heavily subsidised and protected. But if Trump seriously wanted to support American manufacturers, he'd do a lot of this and stare down his enemies.
Re: Then let him do something about it
@Hollerithevno
You do realise that Trump is a Republican? You're asking him to take on Democratic (socialist) policy. That, right there, is the issue with the general voting US population. You voted the idiot into office to MAGA by investing in American businesses to make them competitive in the marketplace. Yet, you want him to pump public money into financially nonviable industries?
> The adoption of 5G phones "failed to take off", he added, as "store closures and virus fears limited interaction" with demo models
With limited 5G coverage in UK, Europe & USA, which is not about to improve soon thanks to throwing Huwawei out of various networks, I see no point in buying a 5G handset. My next phone may have 5G but it will only be because the manufacturer included it in a model that I otherwise want. Given a choice between identical 4G and 5G models I would pick the former. Why pay extra for something you can't use?
Worse, what kind of 5G will your next phone have? It appears that most new 5G phones lack UWB compatible chipsets or antennas. There are benefits to sub-6GHz 5G over LTE, but they don't become apparent until you have a critical mass of available spectrum. North America and Europe probably won't hit that point until late 2021 or 2022 after the legacy 3G networks are shuttered and their channels reallocated.
As for the country of origin issue the article mentions, I went back through 22 years of handsets I've owned (I really should toss these things...) and found that I have ones from Mexico, Brazil, and Malaysia. Everything else is from China. Even the old Motorola analog AMPS car phone I used to have was manufactured outside of the US.
Seems to me that maybe the US hasn't been a viable manufacturer for some time. Maybe instead of trying to fit a size 44 foot into a size 40 shoe, the US should focus on moving that manufacturing back to some of its friendly low-cost neighbors that are within its sphere on influence.
Comparatives
This was on the back of a 10 per cent year-on-year spike in sales to 15 million in a total market that declined 5 per cent to 31.9 million.
This, and the rest of the paragraph is confusing because it mixes relative growth for different scales. Far better to lead with the declining market and then highlight that not only did Apple grow market share, it also sold more devices. And, while the I-Phones are made in Shenzhen (and who knows what else gets soldered in) the value is earned in the US.
But I think the US is increasingly an outlier here.
Sorry El Reg, things don't always pivot quickly.
From a purely logistics issue, it takes time to implement a massive decision to change where and how products are sourced.
What the world learned from COVID-19 is that much of its supply chain for medical clothing and protective gear flows from Chinese plants.
So while 3M which manufactures the N95 masks in China may want to diversify their supply chain, it will take time and investment to move from China to another location.
Same for companies like Cisco , Apple and others which have built up manufacturing capabilities in China.
Look at the Foxpro plant in Wisconsin near the IL boarder. Is that built yet? Look at the water usage issues, pollution issues and all of the red tape that exists in the US but doesn't exist in China... think about that for a second.
The other issue is that China has been lax on pollution laws. So some manufacturing in China can't easily be moved to countries like the US, Canada or even Europe based on the regulations and additional cleanup that has to occur.
So while Trump is correct and event the 5 eyes agree with the security issue... there has to be a viable alternative not built in China, along with the long overdue process of finding an alternative.
Just something to think about. Lets look at the world in 5 years ... assuming we don't kill ourselves off before then.
Mine's the jacket with the Guide in one pocket and a towel in the pouch in the back...
Perhaps... just perhaps... ?
Someone sould tell Trump that he should be setting an example to the rest of his citizens and use a phone where all the hardware and software components are made in the USA. He needs to ditch that NSA approved iPhone at the very least
What? It is not possible?
Oh well... What goes around, comes around.
Re: Hasn't the CCP already won?
Only Americans associate socialism with communism.
In the rest of the Western world, socialism is a complementary choice in a democracy, and is accepted as part of capitalism.
Re: Hasn't the CCP already won?
@AC
"Only Americans associate socialism with communism."
And anyone who realises that communism is socialist
One Possibility
It's entirely possible that in the working lifetime of those now in the global workforce, the importance of manufacturing as we know it will shrink dramatically. Between robots that actually work, much enhanced 3-D printing and the possibility of shipping much stuff to folks as "kits" that any twelve year old can assemble, the classical "factory" may largely fade away in the next few decades. If that happens, and it could, the social and economic impacts will be dramatic. I doubt the transition will be smooth. Best fasten your seatbelts if that actually seems to be coming about.
Don't worry, be happy!
Maybe in about a decade they will get made in India!
HTC Korean
I was thinking HTC, samsung, and LG were all Korean. Do they use China for manufacturing?
Backdoors with System level permissions
The problem with many of these cheap Androids is that they have backdoors which allow apps to be installed remotely with SYSTEM level permissions:
https://wuffs.org/blog/digitime-tech-fota-backdoors
And TCL/Alcatel, which can be found everywhere, like at your grocer, Walmart or drug store, has been found to be behind most of the malicious spyware apps found in the wild and on the Google Play store with ties to the Chinese State.
https://www.gadgetguy.com.au/tcl-and-alcatel-direct-links-to-massive-spyware-operation/
(But then the US has Google and Facebook so....)
Build your own phone
Virtually all phones are made in China even though the US started the designs, let's return to the [1]old days . - LOL.
[1] https://blog.arduino.cc/2020/06/09/no-string-attaches-this-tin-can-telephone/