The Air Current
Purchase and download a copy of this article

Where a Boeing 777 ends an iPhone begins.

At Pinal Airpark in Marana, Ariz. a wrecking claw positioned itself to rip into the fuselage of a retired Air China 777-200. The rapid, but deliberate, disassembly of an airliner produces a particularly sickening kind of crunching sound. In under three minutes, the aft fuselage snaps under its own weight after repeated bites into its structure, its tail falling to pavement.

Its life as an airliner is over. Its mangled parts will be neatly collected and recycled. The 7000 series aluminum in this 777’s 1998 vintage fuselage is the prime ingredient in Apple’s modern flagship phones along with other mobile phones and smart watches.

But this 777 is having trouble embarking on its second life in China. “We did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Chief Executive Tim Cook wrote in a letter to shareholders, forecasting its full year revenue would be down sharply on slow iPhone sales. “Over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.”

The news from the economic bellwether shook the global economy. The slowdown in China landed with full weight on Cupertino and Wall Street. But a drop in consumption of one of the most coveted goods on Earth sent a chill through an economic system that has pinned its future on Chinese growth. Apple and Boeing need China desperately. In 2017, China counted for 13% of Boeing’s revenue and 15% of Apple’s.

Related: A tempest rages around Boeing’s quiet island outpost in China

There hasn’t yet been any disclosed or quantifiable slowdown in Chinese flying, the engine that keeps Airbus and Boeing assembly lines producing at record speed. UPDATE: For the whole of 2018, Boeing did not receive a single identified purchase from a Chinese airline or lessor. Airbus’s 2018 tally is hardly better — just 25 jets from two customers.6

If orders have been collected by both in 2018, Chinese buyers appear reticent to put their names behind their commitments. The Chinese backlog lives in much of Boeing and Airbus’s unidentified customer tally, awaiting the Government’s final politically-tinged blessing.

The Lifecycle

But beyond the starting and ending point that connects both products, the unfathomably profitable franchises — Apple’s iPhone and Boeing’s 777 — are both facing the challenges in China and beyond that come with the later stages of a product lifecycle. As lifetimes go, the 777 is precisely twice as old as the iPhone.

Continue Reading...

Jon Ostrower is Editor-in-chief of The Air Current. Prior to launching TAC in June 2018, Ostrower served as Aviation Editor for CNN Worldwide, guiding the network's global coverage of the business and operations of flying. Ostrower joined CNN in 2016 following four and half years at the Wall Street Journal. Based first in Chicago and then in Washington, D.C. he covered Boeing, aviation safety and the business of global aerospace. Before that, Ostrower was editor of the award-winning FlightBlogger for Flightglobal and Flight International Magazine covering the development of the Boeing 787 Dreamliner and other new aircraft programs from 2007 to 2012. Ostrower, a Boston native, graduated from The George Washington University's School of Media and Public Affairs with a bachelor's degree in Political Communication. He is based in Seattle.

Next Post
error: Content is protected !!