Posted on 09/05/2020 7:22:34 AM PDT by SeekAndFind
Take a look at the back of the box from which you unpacked your iPhone and you'll see this: "Designed by Apple in California Assembled in China."
Reading this tagline might trigger a vision in your mind of Jonathan Ive, Apple's legendary chief design officer, dropping the drawings and technical specs for the next-generation iPhone into a (highly secure) shared folder that its low-cost suppliers in China can access as they manufacture and assemble the product by the millions.
But as Apple CEO Tim Cook recently pointed out, this picture wouldn't tell the entire story of how an iPhone actually gets made today, or why Apple prefers to make them in China. At the Fortune Global Forum in Guangzhou in early December (my firm, McKinsey & Company, was the Knowledge Partner), I listened to Cook as he explained why Apple continues to favor China as its central base for manufacturing iPhones:
The number one reason why we like to be in China is the people. China has extraordinary skills. And the part that's the most unknown is there's almost two million application developers in China that write apps for the iOS App Store. These are some of the most innovative mobile apps in the world, and the entrepreneurs that run them are some of the most inspiring and entrepreneurial in the world. Those are sold not only here but exported around the world.
Highly skilled software developers developing apps for the App Store are one reason Apple likes to be in China. But the depth of highly skilled labor in the manufacturing space is why Apple makes its iPhones there:
China has moved into very advanced manufacturing, so you find in China the intersection of craftsman kind of skill, and sophisticated robotics and the computer science world. That intersection, which is very rare to find anywhere, that kind of skill, is very important to our business because of the precision and quality level that we like. The thing that most people focus on if they're a foreigner coming to China is the size of the market, and obviously it's the biggest market in the world in so many areas. But for us, the number one attraction is the quality of the people.
Citing an example of the type of a highly skilled supplier Apple works closely with, Cook talked at length about recently visiting one company that it has collaborated with for several years:
I visited ICT--they manufacture, among other things, the AirPods for us. When you think about AirPods as a user, you might think it couldn't be that hard because it's really small. The AirPods have several hundred components in them, and the level of precision embedded into the audio quality--without getting into really nerdy engineering--it's really hard. And it requires a level of skill that's extremely high.
And the idea that Apple simply hands over the design to a company like ICT, which just manufacturers according to spec, is simply untrue, says Cook:
It's not designed and sent over--that sounds like there's no interaction. The truth is, the process engineering and process development associated with our products require innovation in and of itself. Not only the product but the way that it's made, because we want to make things in the scale of hundreds of millions, and we want the quality level of zero defects. That's always what we strive for, and the way that you get there, particularly when you're pushing the envelope in the type of materials that you have, and the precision that your specifications are forcing, requires a kind of hand-in-glove partnership. You don't do it by throwing it over the chasm. It would never work. I can't imagine how that would be.
Addressing the designed-in-California, made-in-low-cost-China impression that many people have--an impression reinforced by the tagline that is printed on every box containing a new iPhone--Cook had this to say:
There's a confusion about China. The popular conception is that companies come to China because of low labor cost. I'm not sure what part of China they go to, but the truth is China stopped being the low-labor-cost country many years ago. And that is not the reason to come to China from a supply point of view. The reason is because of the skill, and the quantity of skill in one location and the type of skill it is.
And China has an abundance of skilled labor unseen elsewhere, says Cook:
The products we do require really advanced tooling, and the precision that you have to have, the tooling and working with the materials that we do are state of the art. And the tooling skill is very deep here. In the U.S., you could have a meeting of tooling engineers and I'm not sure we could fill the room. In China, you could fill multiple football fields.
Cook credits China's vast supply of highly skilled vocational talent:
The vocational expertise is very very deep here, and I give the education system a lot of credit for continuing to push on that even when others were de-emphasizing vocational. Now I think many countries in the world have woke up and said this is a key thing and we've got to correct that. China called that right from the beginning.
This article also appeared on LinkedIn.
Watch the entire interview with Tim Cook at the Fortune Global Forum:
And they sell them for hundreds of dollars more than they’re worth; plus awkward to use.
Liar. You like slave labor. I’ll use two cans and a string before I buy a rotten Apple.
Can’t we get unemployed coal miners to code these apps here? /s
Yeah, Americans can’t program despite inventing most of the languages used today.
China is profoundly hampered by the very high level of corruption in Chinese society.
Imagine pulling from the available unskilled labor pool in this country.
LOL
I will never understand how someone can post such a long and important thread and not make a comment :-) do you have no opinion on it?
Or do you believe the Chinese are superior at a work level I’m every single conceivable area and just are too afraid to say it?
Here’s 5 bucks. Go buy some courage
I heard so practically perfect in every single way Chinese sell it cheap.
Of course it has nothing to do with the fact that it is a totalitarian regime and you better heap tons of phrase on it if you want to keep making incredibly cheap products there
now he has an idea genius. Why don’t you list all the defective and deadly products that have come out of China?
Or did they go to the bad schools? :-)
The number one reason why we like to be in China is the people. China has extraordinary skills. And the part that’s the most unknown is there’s almost two million application developers in China that write apps for the iOS App Store. These are some of the most innovative mobile apps in the world, and the entrepreneurs that run them are some of the most inspiring and entrepreneurial in the world. Those are sold not only here but exported around the world.
...
Why does that set off my BS detector?
While we’re on the subject, I was watching a TV ad for masks the other day. The was an American flag at the bottom of the screen. And next to the flag, in large letters: “Shipped from our warehouse in the United States.”
But no mention of where the masks were actually made. I guess somebody forgot to include that info.
China has tens of millions of skilled labor techs.
The US has tens of millions of millennials.
Apple is there because - like all multi-nationals - they see China’s brand of authoritarian capitalism as the future, and they are working hard to bring it to the USA. To them, China is not a competitor nor a military rival nor a human rights violator - it is simply a better reality for BigCorp than the one they operate in now.
“Liar. You like slave labor. I’ll use two cans and a string before I buy a rotten Apple.”
So, which other phone do you use that’s made in China?
RE: Yeah, Americans can’t program despite inventing most of the languages used today.
I think you’re confusing software with assembly pf the hardware.
RE: Why does that set off my BS detector?
Well, don’t just write a one liner... tell us why it’s BS.
RE: I will never understand how someone can post such a long and important thread and not make a comment :-) do you have no opinion on it?
Because I want to read YOUR OPINIONS on it before I make my comment. So, go at it and tell me what’s wrong (or right ) about the article.
“In the U.S., you could have a meeting of tooling engineers and I’m not sure we could fill the room. In China, you could fill multiple football fields.”
That is because you and all the other corporations first went to China because of their labor costs, you idiot. You went when that was the only benefit and you created the skills that you now lambaste the US as “not having.” It’s not in the least true.
We have engineering grads in lesser roles because you’ve made the jobs go away.
Is an LG made there? I’ll have to check. If so I’ll have to use two soup cans and a string.
One thing the Chinese are really, really good at is stealing.
They have really talented people — that make 1/10 what talented Americans do because chinese citizens don’t own cars, boats, houses, freedom or much of anything
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