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:
It depends on the model of LG phone. . . But even then some sub-assemblies are still made in China. You cannot escaped it.
The fact is that even the iPhone has parts made in over 125 countries, including the USA. The screen glass, for example, is Gorilla glass from Corning in New York. It is only ASSEMBLED in China, Indonesia, Vietnam, India, Brazil, Ireland, and soon, perhaps in the USA. Apple has Mac computers manufactured in China, Ireland, Vietnam, Indonesia, and the USA.
“India could possibly pull off the same trick and it’s perhaps on the same track. They do have an advantage of many speaking English, but they don’t have the history and tradition that the old Chinese Civil Service System created to value education as a way for anyone to achieve power and status.”
You might find this article comparing China and India interesting...
https://akarlin.com/2012/02/china-superior-to-india/
Think about this for a second. You’ve got people writing code whose first language is not English, nor does it have a western alphabet. Imagine how incredibly difficult that is to overcome. I’m sure that there are ways to compile things and translate, but still...
And wasn’t Apple tauting to it’s user-acolytes the ability to create apps as a side-gig? I guess that failed.
The miners wouldn’t stand a chance. The coding jobs went to Indian job thieves.
Apple SLAVE LABOR MATTERS!!!!!
There is no point in getting tooling skills in the US if the manufacturing is all going to China. The manufacturing has been going to China for decades. Hence the talent developed there. Manufacturing jobs have been declining here in the US, so choosing a manufacturing career is very shaky ground.
Tim Cook is pulling wool over our eyes. My recommendation is that if you are an American company and you are primarily sending jobs to other countries, then you should not get tax benefits or deductions. You should not get access to research funded by American tax payers. You should not get protections provided by the U.S. Government.
American tax payers have been hoodwinked and taken to the cleaners for so long by some of these companies and foreign countries like China.
Millions of app designers, and a portion of them are very disciplined developers. And smart, too! In fact, that is why so many of the developers work for some group called Intelligence. And they always put a little ‘extra’ in their apps!
However, the discouragement of young people from Math and Science and tech studies continues through today. I was taking Algebra in the seventh grade, calculus in ninth. Now you are lucky to find it as an 11th grade class.
Try and find a class in high schools that tech the manual arts and you’d be hard pressed. Woodworking? Electronics? Even programming? Logic? Hard to find. We had Electronics in 10th grade and I was working with Bell Labs on special projects for High School Students on speech recognition and electronic speech creation, as well as a Bell Labs project on creating a transistor from scratch.
We educated at least two generations of tech know nothings. Other countries were concentrating on kids who KNOW tech and math. Us? We raised two generations or three of snowflakes who know when they are offended by micro-aggression and Marxist pseudo thought. We DO have the educational know how to teach the tooling and math and science, but those classes are filled with students from China and Indonesia. Shame on us for not paying attention to what was happening in our schools that we cannot fill those classes with OUR students!
RE: There is no point in getting tooling skills in the US if the manufacturing is all going to China. The manufacturing has been going to China for decades.
I question this so-called “we don’t have the tooling skills’ premise of Tim Cook.
We still make sophisticated vehicles -— cars, motorcycles and jet planes are just examples, here in the USA. Don’t tell me assembling them do not require assembly and tooling skills.
All very good points. Left out was the social BS being pushed by Apple and other large companies, they enjoy the fruits of America and smear social changes into the face of America.
No, it has not failed. The amount of side-gig income in the App area generated in the US is a multi-hundred billion dollar industry alone.
iOS app economy creates 300,000 new US jobs as developers adapt during pandemic
The iOS app economy has created nearly 300,000 new jobs since April 2019, helping to provide opportunities for Americans of all ages even as COVID-19 continues to create immense challenges and uncertainty for communities across the country. Developers nationwide — including companies such as Caribu, H‑E‑B, and Shine — have adapted their businesses to make sure they can keep supporting their customers during a challenging time.Since the App Store launched in 2008, the iOS app economy has become one of the fastest-growing sectors of the economy. Despite the pandemic, the App Store continues to provide economic opportunities for entrepreneurs of all sizes, helping anyone with an idea reach customers around the world and take advantage of new opportunities that would never be possible without it. The App Store ecosystem now supports more than 2.1 million US jobs across all 50 states — an increase of 15 percent since last year — as part of the 2.7 million jobs Apple supports across the country...
In 2019, Apple’s App Store generated $519 Billion in revenues world wide, and since approximately 50% of the App store’s revenue is generated in the US, it’s a safe bet to assume about $250 billion of that was generated in the US. Hard to call that “failed” with 2.1 million developers taking home 70% of that $250 billion.
Would have appreciated knowing the name of the author, Glenn Leibowitz, when you filled out the posting format.
Translation: “No unions to prevent innovations like robotics.”
He is not wrong though. You could probably go to Africa and get labor for 1/10th the cost as China now. Trouble is, would they have the ability to do this work on the scale that China can?
It is also true that we in the West have become lazy and entitled. Our great-grandparents had to work 12 hours a day sometimes and the definition of “successful” was being able to eat. Nowadays people have luxuries a Roman Emperor couldn’t conceive of and depression and dissatisfaction plague us. We’re on the hedonic treadmill and anything less than doubling our standard of living every generation creates unease in our minds that we aren’t on the right path.
Success always contains within it the seeds of its own destruction.
Translation: “We transfer American-owned technology by developing it over there. What could go wrong?”
China has some of the most modern and sophisticated manufacturing facilities in the world. Highly automated too. Cheap labor isn’t that big of a factor.
In America a high percentage of our facilities are old and inefficient. Add high energy costs, taxes, and regulations and makes us non-competitive.
Translation: “American so dumb.”
Translation: “Schoolchildren who do not follow orders are shamed and beaten, and so are their families.”
It’s also where the market is. 7 of the top 10 cellphone markets are in Asia. Anybody making cellphones anywhere else is doing it wrong.
RE: It’s also where the market is. 7 of the top 10 cellphone markets are in
Asia
Ok, let me ask this because I really want to know... is CHINA the only skilled AND cost effective country that can make Smart Phones in Asia?
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