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Apple opens store on China’s WeChat platform

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According to Tencent, Apple has recently launched an online store on the popular Chinese app WeChat.

The store has been integrated into WeChat’s mini-programs, which are small applications within the platform that offer various services such as e-commerce, finance, and transportation.

WeChat
Image Source: thehindu.com

Apple’s store on WeChat will feature a range of its products, including iPhones, iPads, Apple Watches, and Macs. This is not the first time Apple has established a presence on a Chinese platform, as it already operates a store on Alibaba’s Tmall e-commerce platform, which is a competitor of Tencent.

In addition to this, Apple also experimented with live commerce in China earlier this year, attempting to sell its products through interactive live streaming.

China is a significant market for Apple outside of the United States. According to research firm Counterpoint, the iPhone 13 series dominated the top three spots in the list of best-selling phones in China in 2022.

Despite a decline in China’s smartphone market in the first quarter of 2023, Apple has managed to maintain its position as the leading handset vendor in the country, capturing a 20% market share. This represents a 2% increase compared to the same period in the previous year, as highlighted in a report by Counterpoint.

However, Apple has been actively working to diversify its manufacturing operations by reducing its reliance on China. JP Morgan analysts reported last year that the company plans to shift 25% of its iPhone production to India and 20% of its iPad and Apple Watch production to Vietnam by 2025.

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This strategic move aims to mitigate risks associated with overdependence on a single manufacturing location and take advantage of the benefits offered by other countries in terms of cost, logistics, and supply chain resilience.

In summary, Apple has expanded its presence in the Chinese market by launching an online store on WeChat, one of China’s most popular apps. This move follows Apple’s existing store on Alibaba’s Tmall platform and its previous foray into live commerce.

While China remains a crucial market for Apple, the company is actively working to diversify its manufacturing operations by gradually shifting production to countries like India and Vietnam. These efforts align with Apple’s strategy to reduce its dependence on a single manufacturing base and leverage the advantages offered by different regions.

The launch of Apple’s online store on WeChat demonstrates the company’s commitment to reaching Chinese consumers through diverse channels and platforms

micron

Micron expects revenue impact following China ban

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A restriction by China on the distribution of Micron memory chips to important domestic corporations represented the most recent turning point in the Sino-American business spat, and a US-based micron technology corporation predicted a blow to earnings in the low-single to high-single-digit percent.

Micron
Image Source: investing.com

 late on Sunday, China’s cyberspace watchdog announced that Micron, the largest US memory chip manufacturer, was unsuccessful in its network safety examination and would be prohibited from selling to controllers of critical assets.

It did not elaborate on the threats it had identified or the products of the business that would be impacted.

Experts noted that the majority of Micron’s major Chinese clients are firms in the customer electronics industry, and thus they foresaw little immediate effect on the company. However, they cautioned that political hazards may cause some businesses to remove Micron products from their supply networks.

Also Read: Australia hits buy-now-pay-later sector with consumer credit law

At a press conference, Mark Murphy, Chief Financial Officer of Micron, said it was unknown what worries Beijing had and those direct and indirect sales to businesses with headquarters in China were responsible for around a quarter of the chipmaker’s earnings.

“We are currently estimating a range of impact in the low single-digit percentage of our company’s total revenue at the low end, and high single-digit percentage of total company revenue at the high end,” Murphy said.

Source: malaymail.com

The comments allowed Micron’s stocks to recover some of their damages, the stock’s Nasdaq closing value was down 2.8 percent at US$66.23 (RM301.20).

Washington disagreed with Beijing’s action, however, it boosted the stock prices of Micron’s competitors in China along with South Korea, who are thought to profit as mainland enterprises look for memory chips from additional suppliers.

“We firmly oppose restrictions that have no basis in fact,” a spokesperson from the US Commerce Department said on Sunday.

“This action, along with recent raids and targeting of other American firms, is inconsistent with (China’s) assertions that it is opening its markets and committed to a transparent regulatory framework.”

Source: malaymail.com

Amid Chinese officials’ inspections and excursions to US management consultancy firm Bain and business surveillance group Mintz Group, hostilities between the US and China have risen recently.

Considering a succession of export restrictions by Washington on specific American products including chipmaking equipment to prevent them from being utilized to boost China’s defense potential, Beijing has now aimed at Micron as the primary US chip manufacturer.

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During an argument over semiconductor technology and deteriorating ties between Washington and Beijing, China started the assessment in late March.

The move also comes shortly after the Group of Seven nations agreed to “de-risk, not decouple” economic engagement with China and as US President Joe Biden called for an “open hotline” between Washington and Beijing.

The U.S. Business Department declared that it would communicate with Beijing officials officially to get more information about their conduct.

TikTok

Why does the US want to ban TikTok?

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In order to “protect Montanans” from alleged Chinese spying, Governor Greg Gianforte of Montana signed legislation on Wednesday banning Chinese-owned TikTok from functioning in the state. This makes Montana the first U.S. state to outlaw the well-known short video app.

TikTok poses a national security danger, according to FBI Director Chris Wray, who also noted that Chinese businesses are essentially forced to “do whatever the Chinese government wants them to in terms of sharing information or serving as a tool of the Chinese government.”

TikTok
Image Source: theguardian.com

Congressmen expressed dissatisfaction in March about the Chinese government’s “golden share” in ByteDance, which gives it control over TikTok.

Also Read: Google to delete inactive accounts starting December

A Chinese government-affiliated business owns 1% of the ByteDance subsidiary Douyin Information Service, according to TikTok, which also claims that the ownership “has no bearing on ByteDance’s global operations outside of China, including TikTok.”

TikTok operations in the United States are a national security threat, according to FBI agent Wray, since the Chinese government may use video-sharing software to influence users or take control of their devices.

Among the dangers, according to Wray, is “the potential for the Chinese government to use [TikTok] to control data collection on millions of users or control the recommendation algorithm, which could be used for influence operations.”

Paul Nakasone, director of the National Security Agency, expressed concern in March about the information TikTok gathers, the mechanism it uses to distribute it to users, and “the control of who has the algorithm.” He claimed the TikTok platform may facilitate extensive influence operations since it could “turn off the message” and actively influence users.

According to TikTok, it “does not permit any government to influence or change its recommendation model.”

A 2017 National Intelligence law, according to lawmakers, gives the Chinese government the power to compel ByteDance to divulge user information from TikTok.

According to TikTok, because it was founded in California and Delaware, it is governed by American laws and regulations. According to TikTok’s CEO, the company has never shared and will never share user information with the Chinese government.

Also Read: Apple to open the first online shop in Vietnam

Eight states, including California and Massachusetts, initiated an investigation into TikTok’s potential participation in the harm to young people’s physical and mental health in March 2022. The focus of the inquiry is on how TikTok increases young users’ engagement, including how it purportedly lengthens their time on the network and how frequently they use it.

In August 2020, former President Donald Trump issued executive orders seeking to ban TikTok in the United States unless it was sold to an American company. The main reason cited for the proposed ban was the potential threat to national security posed by the app’s data practices. However, various legal challenges and negotiations delayed the implementation of the ban

chip

Will China’s new policy help to tackle the chip talent shortage?

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China is stepping up efforts to cultivate domestic semiconductor ability as it attempts to quickly fill a skills gap that has been exacerbated by American efforts to restrict Beijing’s access to cutting-edge chip technology.

Thanks to increased funding for prestigious universities and a boom in smaller, private schools with an emphasis on shorter-term education, enrollment in undergraduate and graduate programs has increased over the past five years.

chip
Image Source: theprint.in

While entry-level salaries have doubled, certain graduates with degrees in other fields are being drawn into the expanding sector. A white paper estimates that China will be short 200,000 industry employees this year.

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Closing this gap is becoming even more crucial since the U.S. wants to cut China out of global supply chains due to concerns that any advanced chips it produces will ultimately be used by China’s military.

Liu Zhongfan, a member of the Chinese Academy of Sciences, told local media earlier this month that China needs to prioritize developing talent even over finding quick fixes to its supply-chain problems.

Students and experts, however, told Reuters that more modern schools in Taiwan and the US give more practical industry experience than China’s emerging chip curricula. According to a poll conducted in 2022 by the Chinese research company ICWise, more than 60% of students majoring in chip engineering in China graduate without having held a relevant internship.

Professors at Chinese colleges are frequently rewarded for writing papers rather than imparting cutting-edge techniques that are helpful in a company lab or chip manufacturing facility.

Taiwan Semiconductor Manufacturing Co. (TSMC), a leading chip manufacturer, has set up research facilities at four universities in Taiwan. In China, there have been some moves in this direction. Semiconductor Manufacturing International Corp (SMIC), its largest chip foundry, announced in 2021 the establishment of a School of Integrated Circuits at Shenzhen Technology University.

According to Hu Yunwang, founder of a Shanghai-based employment agency for chips, the average yearly salary for an entry-level engineer in the industry has increased since 2018, from approximately 200,000 yuan ($28,722.43) to 400,000 yuan, underscoring the supply-demand imbalance.

Also Read: Accenture to Cut 19000 Jobs as IT Spending Slows

With chip engineering training programs that claim to offer a fast track and primarily target graduates who specialized in a topic tangentially associated with chip engineering, several private schools have popped up to provide a temporary answer.

A former engineer from Arm Ltd. founded EeeKnow in Shanghai in 2015, offering in-person courses on topics like “Cortex-M3 MCU front-end design and verification in 60 days,” costing between 2,000 and 4,000 yuan.

china

U.S. set to further tighten chipmaking exports to China

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According to Bloomberg, the United States intends to impose even stricter limitations on the export of machinery for the manufacture of semiconductors to China.

The US government reportedly informed US businesses of the plan and informed them that the restrictions might be revealed as soon as next month. According to the report, the Biden government intends to collaborate with Japan and the Netherlands.

China
Image Source: theprint.in

The action would further disrupt the chip-making sector, which is already adjusting to regulations put in place in October. These limitations prohibited US citizens from working in China as well as other nations that might represent a threat to national security and demanded export licenses for specific machines. Additionally, there are clauses that restrict the selling or support of technology for particular product categories.

Also Read: Germany planning to ban Huawei, ZTE from parts of 5G networks

The administration intends to work with the governments of Japan and the Netherlands, two other important nations for chip manufacturing equipment, in accordance with the most recent rules. Currently, licenses are necessary for the purchase of about 17 of the expensive machines necessary for producing semiconductors, especially if Chinese clients are involved.

When Tokyo and The Hague’s limitations are taken into account, that number is expected to double. The three largest semiconductor equipment producers in the US are Applied Materials, KLA Corp., and Lam Research Corp.

They control the market along with ASML Holding NV of the Netherlands and Tokyo Electron Ltd. of Japan. Building factories with the capacity to produce the most cutting-edge chips is impossible without the availability of their finest products.

US businesses have been compelled to inform investors that losing access to the Chinese market will result in billions of dollars in lost revenue. The Biden administration has pushed Tokyo and The Hague to impose the same restrictions on their businesses in order to level the playing field and close the ring around China’s fledgling chip efforts.

The Dutch government announced earlier this week that it was planning restrictions on specific chipmaking equipment. An additional restriction to those already in place for the most advanced lithography equipment would be placed on the export of so-called immersion DUV lithography products.

The manufacturing of the most sophisticated chips in the world requires this technology. Mao Ning, a spokesman for the Chinese foreign ministry, stated on Thursday that China was adamantly opposed to the limitations because they would “intervene and limit normal economic and trade exchanges between Chinese and Dutch companies.”

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Late last year, the US enacted a number of export controls, one of which barred China from obtaining certain semiconductor chips produced anywhere in the world using US equipment.

There are several areas where US-China ties are strained. Along with technology, the debate between the two factions frequently centers on Taiwan. China does not rule out using force to annex Taiwan because it views it as part of its own land. The US is Taiwan’s largest foreign supporter.

iphone factory

Violent protests at the world’s largest iPhone factory in China

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Workers at the largest iPhone factory worldwide, located in Zhengzhou, central China, engaged in violent altercations early on Wednesday.

Police authorities in China have beaten up workers who were demonstrating over wages and working conditions at the largest iPhone factory, as the number of Covid-19 cases in the nation reached a new daily high.

iphone factory
Image Source: headtopics.com

Videos posted online showed hordes of policemen in white protective clothing and plastic riot shields facing thousands of protestors wearing masks. After a demonstrator retrieved a metal pole that was used to assault him, police struck him with clubs and kicked him. In other films, demonstrators could be seen shooting fire extinguishers at police.

In response to concerns about unsafe working conditions, thousands of employees at Foxconn, the largest contract manufacturer of cellphones and other electronics, left the facility in Zhengzhou last month, making it difficult for the company to fulfill orders for the iPhone 14.

Read More: Apple Restricts iPhone AirDrop With Everyone to Just 10 Minutes in China

According to an employee named Li Sanshan, demonstrations started on Tuesday when workers who had traveled great distances to accept a position at the factory claimed that the company altered the conditions of their compensation.

Foxconn apologized and said that the confusion over compensation was caused by a “technical error”. In an extraordinary move meant to placate dissatisfied new hires who were instrumental in the violent protests that shook the largest iPhone plant in the world, Foxconn has started providing 10,000 yuan to any worker who opts to quit.

The compensation, which typically exceeds a month’s pay for Foxconn’s blue-collar workers, is likely to appease some workers after they staged an unusually violent protest on Wednesday that brought attention to the negative economic and social effects of Xi Jinping’s Covid Zero plan.

The rallies are being held amid intense resentment over the Covid restrictions, which have forced millions of individuals to remain in their homes and closed businesses and offices in many parts of China. With 31,444 new infections, China on Thursday recorded the most Covid cases ever.

Despite the comparatively low numbers of infections and fatalities in comparison to other nations, China’s Communist party is nevertheless dedicated to its “zero-Covid” strategy, which strives to isolate each case and completely eradicate the virus.

By Wednesday night, the plant was operating normally, according to a statement from Foxconn. However, the demonstrations brought attention to how Xi’s program, which relies on quick lockdowns to eradicate the disease anywhere it appears, is burdening the economy and upending large portions of the entire supply chain.

The Foxconn incident serves as yet another warning to Apple about the risks of relying on a sizable production system headquartered in China in an era of unpredictable policies and shaky trade ties.

Factories like Foxconn’s, which assemble toys, consumer electronics, and other things for the global market, are the foundation of China’s position as an export powerhouse. Foxconn employees’ growing discontent poses a danger to further halting production at a facility that produces the majority of Apple’s bestselling products for export.

Apple has already issued a warning that it will supply fewer smartphones than expected during the crucial holiday quarter, and that wait periods for iPhones have gotten so long that they may extend past Christmas in some circumstances.