The Sunday Times (London) has an extended excerpt of Patrick McGee’s Apple in China. In my link to Jon Stewart’s terrific interview with McGee, I noted “Apple both enabled and encouraged its China suppliers to build components for Apple competitors”; the excerpt gives the details:

The ripple effect from Apple’s investments across Chinese industry was accelerated by a rule imposed by Apple that its suppliers could be no more than 50 per cent reliant on the tech giant for their revenues. This was to ensure that a supplier wouldn’t go bust overnight if a new Apple design did away with components it manufactured. So as iPhone volumes soared from under ten million units on its launch in 2007 to more than 230 million in 2015, Apple would encourage its suppliers to grow their non-Apple business just as quickly. The upshot of this policy was that Apple gave birth to the Chinese smartphone industry.

In 2009 most smartphones sold in China were produced by Nokia, Samsung, HTC and BlackBerry. But as Apple taught China’s supply chain how to perfect multi-touch glass and make the thousand components within the iPhone, those suppliers took what they knew and offered it to Chinese companies led by Huawei, Xiaomi, Vivo and Oppo. Result: the local market share of such brands grew from 10 per cent in 2009 to 35 per cent by 2011, and then to 74 per cent by 2014, according to Counterpoint Research. It’s no exaggeration to say the iPhone didn’t kill Nokia; Chinese imitators of the iPhone did. And the imitations were so good because Apple trained all its suppliers.

To get this message to Beijing, Tim Cook and his deputies visited Zhongnanhai, the citadel of communist power near the Forbidden City, in May 2016. They explained that Apple wasn’t just creating millions of jobs; it supported entire industries by facilitating an epic transfer of “tacit knowledge”– hard-to-define but practical know-how “in the art of making things”, as defined by the China-born Federal Reserve economist Yi Wen, who believes that such knowledge was “the secret recipe” behind Britain’s Industrial Revolution.

A former Apple executive says this message was “music to the ears of China”. Beijing had spent decades trying to catch up with the West’s lead in advanced industry, scientific research and economic might. It often resorted to spying, outright theft or coercive tactics. But here was America’s most famous tech giant willingly playing the role of Prometheus, handing the Chinese the gift of fire.

(Via Daring Fireball.)