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Apple CEO Tim Cook: This Is the No. 1 Reason We Make iPhones in China (It's Not What You Think). China is much more than a source of low-cost, low-skilled labor.
INC. ^

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:

CLICK ABOVE ARTICLE LINK FOR THE VIDEO



TOPICS: Business/Economy; Computers/Internet; Society
KEYWORDS: apple; asia; china; iphone; manufacturing; timcook
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To: SeekAndFind

Workers in China do what they’re told and don’t complain. That’s where they got us.


21 posted on 09/05/2020 7:39:07 AM PDT by zeebee
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To: dp0622

RE: Why don’t you list all the defective and deadly products that have come out of China?

My first opinion is this -— IT IS DANGEROUS TO DEPEND ON ONE COUNTRY CONTROLLED BY A TOTALITARIAN GOVERNMENT WHICH CAN SEIZE PRODUCTION ANYTIME IT WANTS FOR YOUR SOLE SUPPLY.

Having said that,I question your above premise.

Yes, China makes defective and deadly products... but you are assuming that ALL products, like the iPhone are of poor quality and Apple Execs with tolerate shoddy worksmanship. If so, explain to me why people all over the world are still buying Apple’s iPhones. The market decides and they tell us that at least in this one product — Smart Phones from Apple, China’s worksmanship is NOT shoddy at all.


22 posted on 09/05/2020 7:40:33 AM PDT by SeekAndFind
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To: Moonman62

It sounds China-approved.


23 posted on 09/05/2020 7:40:33 AM PDT by ConservativeMind (Trump: Befuddling Democrats, Republicans, and the Media for the benefit of the US and all mankind.)
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To: aquila48

As far as I can tell it’s made in South Korea. I’d have to look at the box it came in and obviously I don’t have it now.


24 posted on 09/05/2020 7:40:37 AM PDT by HighSierra5
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To: SeekAndFind

I think you’re confusing software with assembly pf the hardware.


The skilled workers are in China because that is where the jobs are.


25 posted on 09/05/2020 7:41:15 AM PDT by lodi90
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To: SeekAndFind

I was talking with a friend last year and he was saying that it was cheaper for his company to hire up a team of electrical engineers in Spain than it was for them to do it in Shenzen. also, the ones in Shenzen are more likely to job hop. China has enormous production capabilities and are no longer the cheap labor express.


26 posted on 09/05/2020 7:42:37 AM PDT by glorgau
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To: SeekAndFind

And so we pay China to develop state of the art engineering and manufacturing capabilities deployed in China rather than the US. And it’s cheap. It’s win-win.


27 posted on 09/05/2020 7:42:55 AM PDT by AndyJackson
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28 posted on 09/05/2020 7:43:30 AM PDT by mylife (Opinions: $1, Today's Special, Half Baked: 50c)
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To: SeekAndFind
quality of people...?....in general, China persecutes and enslaves minorities and encourages, almost forces, people to abort their babies, especially their girl babies...we've all heard rumors about the Chinese taking organs from living prisoners to "donate" to the highest bidder....

naw....I'll reserve my opinion of the "quality of people" in China...

29 posted on 09/05/2020 7:43:53 AM PDT by cherry
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To: ConservativeMind

RE: 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

I question this premise. If we are able to manufacture sophisticated cars and planes here in the USA with all the intricate computerized chips that go into these vehicles, why would Tim Cook say that we can’t fill a room for tooling engineers?

This man’s statement is not only a super exaggeration, it is FALSE.


30 posted on 09/05/2020 7:44:11 AM PDT by SeekAndFind
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To: Leaning Right

“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.” “

While looking high and low for American made masks, I encountered also the “shipped from our warehouse’ and knew that was key for made in China. I finally found American made masks manufactured in Texas. Sadly in Austin but still USA made.
https://www.armbrustusa.com


31 posted on 09/05/2020 7:44:41 AM PDT by texteacher
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To: glorgau

RE: I was talking with a friend last year and he was saying that it was cheaper for his company to hire up a team of electrical engineers in Spain than it was for them to do it in Shenzen. also, the ones in Shenzen are more likely to job hop.

This article isn’t talking about Engineers, it’s talking about TOOLING and ASSEMBLY.


32 posted on 09/05/2020 7:45:20 AM PDT by SeekAndFind
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To: SeekAndFind
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.

I also hate it when people post articles without a comment. The initial comment tells me why they posted it, and often helps me decide if it's worth reading or not. It also inhibits people from just posting article after article all day.

33 posted on 09/05/2020 7:45:36 AM PDT by norcal joe
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To: Leaning Right

I see that all the time. Unfair advertising.


34 posted on 09/05/2020 7:46:03 AM PDT by McGavin999 (Kamala tosses out race cards as fast as a Las Vegas Blackjack dealer)
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To: SeekAndFind

It’s more than the money. It’s treason. It’s the Bush doctrine, Trilateralist, Globalist, that props up a third-world commie regime. It gives them technology to compete with the US, gives them money to build a military, and in turn, causes our military-industrial complex to ramp up, i.e., big $$.

Who funded Hitler? Who funded Lenin? Now who funds Mao? Brought to you by your iPhone.


35 posted on 09/05/2020 7:48:09 AM PDT by eens (beware the errors of Russia)
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To: SeekAndFind
Another example of why large American ‘multi’ national companies simply don't put lots of money into the education concerns of America.

They can always outsource for ‘better’ labor and costs overseas. There simply isn't a need for companies to care about their ‘home’ country anymore.

Apple and other companies are free to criticize and push for change in America, put leave out such concerns for China and their abuses. But, it's not like America cares. The US has constantly said China puts people in camps and cheats on currencies and IP, but we still are keeping our new trade deals. Nuts.

36 posted on 09/05/2020 7:48:20 AM PDT by Theoria (I should never have surrendered. I should have fought until I was the last man alive)
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To: SeekAndFind

Well, if you send all of your manufacturing capabilities to China, don’t be surprised that in a generation China has people trained to work in such environments and the US does not.


37 posted on 09/05/2020 7:48:21 AM PDT by microgeek42
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Mmmm yeah...and they install tracking and intel harvesting capabilities....


38 posted on 09/05/2020 7:48:41 AM PDT by TnTnTn
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To: SeekAndFind; ~Kim4VRWC's~; 1234; 5thGenTexan; AbolishCSEU; Abundy; Action-America; acoulterfan; ...
Why Apple has been using China to assemble many of it’s products. Although many are also assembled elsewhere such as India, Brazil, Indonesia, Ireland, and even in the USA. The reason in China is not low-cost labor, but actually highly skilled workers.—PING!


Tim Cook on Apple Using China
PING!

If you want on or off the Apple/Mac/iOS Ping List, Freepmail me.

39 posted on 09/05/2020 7:50:28 AM PDT by Swordmaker (My pistol self-identifies as an iPad, so you must accept it in gun-free zones, you hoplophobe bigot1)
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To: SeekAndFind

perhaps it is true in his industry


40 posted on 09/05/2020 7:52:21 AM PDT by Chickensoup (Voter ID for 2020!! Leftists totalitarian fascists appear to be planning to eradicate conservatives)
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