Apple Handcuffed to Beijing
L'Express - June, 26th 2025
The latest iPhone 15 Pro Max leaves the store at $1,199, yet its bill of materials and assembly totals barely $502, according to Counterpoint’s teardown: $73 for the camera modules, $67 for the LTPO display, $64 for the A17 Pro chip, $58 for flash memory, and $21 for final assembly. That still yields a gross margin north of 42 percent before a single dollar is spent on marketing or R & D. Such a gulf between price and cost would have been unthinkable without the 25-year ecosystem—built largely under Tim Cook—of more than 200 suppliers clustered between the Yangtze Delta and Guangdong.
Apple’s first Chinese retail store opened in Beijing in 2008, just as the city hosted the Olympics, and the country has since become far more than a factory floor: domestic demand has tripled in twelve years and now accounts for roughly a quarter of Apple’s revenue. In May 2025, despite rivalry from Huawei, Xiaomi, and Honor, the iPhone reclaimed China’s No. 1 spot, thanks to discounts of up to ¥2,530 (about $351) on the iPhone 16, boosting sales during the landmark “618” shopping festival on 18 June. Counterpoint analysts logged a 15 percent rise in iPhone sales over April–May, proof that the device remains an object of aspiration.
Combined with those “Made in China” margins, this commercial surge has propelled Apple’s market capitalisation to $3.3 trillion—a record windfall for millions of American savers tracking the S&P 500 and Nasdaq, where Apple alone weighs in at 10 percent. Since 2013 Cupertino has poured $658 billion into share buy-backs, trimming the share count by a third and mechanically inflating earnings per share. Put simply, American households enjoy a stock-market rent underpinned by value generated in Asia.
To preserve that bounty, Apple has accepted compromises it rarely tolerates elsewhere. Since February 2018, the encryption keys for iCloud China have been held by the state-run Guizhou-Cloud Big Data. In April 2024 the company removed WhatsApp and Threads from its domestic App Store at the direct order of the Cyberspace Administration of China, even as it fights Brussels tooth-and-nail over the Digital Markets Act. The universal promise of privacy thus bows to the raison d’État of a market Apple cannot abandon.
Meanwhile, Chinese subcontractors have become powerhouses. Luxshare—once a humble cable maker—is now the sole assembler of the Vision Pro headset, has taken over a Pegatron iPhone plant, and is eyeing premium models from 2026. BYD Electronics, a subsidiary of the electric-vehicle giant, already produces more than a third of all iPads and channels that know-how into its own robots and batteries, blurring the line between customer and competitor. By nurturing such “pupils,” Apple has forged tools that might one day be turned against it.
Geopolitics makes the calculus even trickier. The $502 material cost would jump to $847 for an iPhone 15 Pro Max shipped to the United States if a proposed 54 percent tariff on Chinese imports takes effect, pushing the American list price from $1,599 to well over $2,300. Hence the Indian offensive: between March and May 2025 Foxconn exported 97 percent of its India-made iPhones to the U.S., while Tata already ships 86 percent of its output there. Still, Donald Trump has publicly insisted he wants Apple assembly not in India but on U.S. soil.
Beijing is tightening the screws in return—stepping up export-licence controls on precision machine tools, curbing the travel of skilled engineers, and hinting at embargoes on rare-earths and LFP battery technologies. These measures target firms looking to shift value to India or Vietnam, delaying the export of strategic equipment from China by anywhere from two weeks to four months. Under such constraints Apple inches forward: “Made in India” iPhones now account for more than 20 percent of U.S. shipments, yet China still controls nine of the device’s ten key components
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