Why Does Apple Outsource Its Manufacturing To China?

At the back of the package from unpacked iPhone, you'll see:

"Designed by Apple in California, Assembled in China."

Have you ever wondered why Apple outsources its manufacturing to China?

In early 2016, there was a great deal of tech-press buzz around then United States presidential prospect Donald Trump's vow to force Apple to make its computer systems in the US.

Barack Obama praised Apple for consenting to start making more of its Macs locally. Aside from raising concerns regarding Mr. Trump's motives and credentials, this likewise made a lot of people curious about the exact location of Apple's production and assembly plants.

Why are Apple's manufacturing plants in China?

When one checks out these working conditions of Apple's Chinese factory, one sees 12-16 hour shifts, pay of $1 per hour or less and dorms with 15 beds in 12x12 spaces.

The obvious assumption is that it's all about cash. Greedy manufacturers want to make more significant profits, so they make their products in places with labor practices that would be prohibited in America.

However, the real reasons Apple makes iPhones in China are as follows: There is not enough capability to make them in the US. Chinese manufacturing techniques are so advanced that it would radically decrease production to switch to an All-American system.

Since a lot of the employees live on-site, they can also press them into service at a minute's notice. And they can also change production practices and speeds exceptionally rapidly.

More reasons why they made the switch to China

These are not the only reasons Apple develops them in Shenzhen. Apple started delivering tasks overseas since the costs of production in Asia were a lot lower. Notably, these minimized costs weren't practical salaries.

They were closer to the supply chain and the determination of the workforce to put in over-time. There's no supply chain, there aren't sufficient super-low-cost employees, and there are not adequate mid-level engineers.

Many Americans seeking work are still hoping for a return to tasks, incomes, and ways of life that have vanished. This is a complex issue, and there's no easy option. But it's a problem this nation is going to need to repair.

Apple flash camera

Apple gets a lot of flack about making in China, and the concern showed up once again just recently upon the release of the iPhone 5. An article on the "Cult of Mac" contrasts Apple to Timbuk2.

Timbuk2 is a US manufacturer of traveler and messenger bags, that happily locates the majority of its manufacturing in San Francisco, among the most costly put on earth.

In truth, labor expenses play a bit part in the formula both for Apple and for Timbuk2. According to the majority of sources, part expenses (which have to do with the very same everywhere) are accountable for the lion's share of Apple's expenditures.

Timbuk2 manufactures in the US due to the fact that it produces customized bags, orderable through its convenient web site. Clients buying custom-made bags can not wait on weeks for a bag to come from China by boat, while shipping by air is expensive, and there would still be some uncertainty due to custom-made clearance.

The much more significant concern for Apple is supplier availability, engineering changes, and flexibility. Apple is big business, and as a New York Times post released in January this year information, its production volumes and frequently unpredictable engineering changes need producing flexibilities and engineering abilities on a scale that is just unavailable in the USA.

There is just no factory efficient in utilizing 250,000 employees day and night in the USA, surrounded by flexible and capable providers. So the area choice isn't really about labor expenses; it's about producing danger and where that risk is best handled.

And the part that's the most unidentified is there are nearly 2 million application designers in China that compose apps for the iOS App Shop. 

The reason Apple manufactures in China is not solely cash

The depth of extremely experienced labor in the production space is why Apple makes its iPhones there:

"China has moved into really advanced production. So you discover in China the crossway of craftsman kind of ability, and sophisticated robotics and the computer technology world. That crossway, which is very unusual to discover anywhere, that kind of ability, is very crucial to our business because of the accuracy and quality level that we like. But for us, the top attraction is the quality of individuals."

Pointing out an example of the kind of a highly-skilled provider Apple works closely with. Cook talked at length about recently going to one business that it has worked together for a number of years:" I visited ICT-- they make, amongst other things, the AirPods for us."

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