Why Apple’s products are ‘Designed in California’ but ‘Assembled in China’
Look at the back of your iPhone, or your iPad, or on the bottom of your Mac. You’ll see the following words embossed somewhere: “Designed by Apple in California. Assembled in China.” Many Americans, all the way up to the President himself, have wondered why Apple has outsourced virtually all of its manufacturing overseas. At a dinner with several top US technology executives last year, President Obama asked Steve Jobs flat out what it would take to bring those jobs back to the US. According to Jobs, there’s simply no way for it to happen.
Why not? Why can’t iPhones, iPads, and all the rest of Apple’s magic gadgets be built in the States? More generally, why can’t more US-based consumer electronics and computer companies do their manufacturing work domestically, helping to create American jobs and boost the struggling economy?
The New York Times asked that question, and after an extremely well-researched report involving interviews with both former and current executives at Apple, the answer the Times found is both simple and chilling: iPhones aren’t made in America because they just can’t be. The infrastructure and labor force doesn’t exist at the levels necessary to support Apple’s operations — it’s not even close.
The Chinese factory where most iPhones reach final assembly employs 230,000 workers. I just asked Siri how many cities in the US have a population higher than that, and the answer was a mere 83 cities — and that’s total population, not workforce. With an average labor force of around 65 percent of the population, only 50 US cities are large enough to provide that kind of labor pool… and even in the biggest US city of them all, New York, 230,000 people still amounts to almost three percent of the city’s entire population. Can you imagine three out of every hundred New Yorkers on an assembly line, cranking out iPhones every day?
Over the past couple of years, we have heard a great deal concerning working conditions at factories owned by Foxconn. The Chinese manufacturing company is responsible for assembling consumer electronics for most of the major vendors out there, including Apple. Around a fourth of those 230,000 people live in company-owned dorms or barracks right on factory property; that’s almost 60,000 people living and working at the factory. Many of the people at “Foxconn City” work six days a week, twelve hours a day, and they earn less than US$17 per day. It may sound inhumane by American standards, but these jobs are in high demand in China — so much so that Jennifer Rigoni, former worldwide supply demand manager for Apple, told the New York Times that Foxconn “could hire 3,000 people overnight.”
Those are just a couple examples of how the scale, speed, and efficiency of Chinese manufacturing outstrips anything the US is currently capable of. But the Times’ report is full of more evidence, and it’s damning. Even though the 200,000 assembly-line workers putting part A into slot B could potentially be classified as unskilled labor, the 8700 industrial engineers overseeing the process can’t be — and according to the Times, finding that many qualified engineers in the States would take nine months. Chinese manufacturers found them all in 15 days.
I’m not vouching for the accuracy of anything in the article but there is a lot to think about in it. Couple of points:
How much more would you be willing to pay for stuff to buy stuff made in America by union workers?
If we moved all the factories here, how would that affect immigration?
Imagine if a war broke out in Asia and all the major countries were involved, wiping out the manufacturing base of the whole region. Japan, China, South Korea, Vietnam, Pakistan and India are all involved. Where would we get all our shiny toys?
What are you looking at me for? I don’t have the answers.
Filed under: Uncategorized
Yay!!!!
Ya think the committee lost its way when it gave an unearned peace prize to Obama?!
Thanks for the link! How this committee has (mis!)operated has been a pet peeve of mine for years. Such a worthy cause to award. Such a mismanagement of awarding.
At this link http://nobelwill.org/ there’s more about the complainant Fredrik S. Heffermehl, the prize, what causes him to complain, and about his books.
We like apple products at home — they just seem less fussy than PCs & windows-based gadgets. But pricey, so we save up for them.
I have never owned an Apple product in my life.
I have read and enjoyed your stuff for years. I quote you frequently.
I like apple but no biggie. I guess you’ve explained elsewhere the no apple stand but could you remind me?
How about an apple tv? Too late for Super Bowl:
From MIT:
The television interface is a huge mess, and a huge opportunity. Instead of a multitude of remote controls for different devices and several poorly thought-out graphical interfaces, imagine a simple, intuitive way to navigate the lineup for an evening’s entertainment. Even die-hard Apple holdouts would surely welcome that.
http://www.technologyreview.com/blog/editors/27548/?ref=rss
It’s not a stand, it’s just a fact.
That’s cool. Thanks.
Between 1980 and 1994, the G7 (mainly the US) helped the Chinese currency depreciate from 1.5 yuan/dollar to 9.0 yuan/dollar. That means the Chinese labor became 6X less expensive relative to US labor over that period. Reagan, Bush I, Clinton, they were all very good for Chinese manufacturing. During that same period, the G7 pressured Japan to double the value of the yen/dollar, making their labor and goods less price competitive. There was so much focus on global balancing and also the FIRE sectors in the US, but not enough focus on building domestic industries and capabilities.
To be clear on Japan and the yen, the rate went from 250 yen/dollar to 125 yen/dollar practically overnight after the Plaza Accord in 1985. Believe the thinking back then was that Japanese banks had become too rich. Also there was great enthusiasm during Reagan to help the Chinese climb out of communism into the global brotherhood of capitalism.
I’m a PC. I have no problems with Apple as they provide a product that’s in demand (look to the OWS preferences, I’ll “wait for it”/sarc).
I like Windows, my desktops and laptops last an average of 5 years. My first PC desktop was bought in 1996 for almost 4k (IBM). I’ve had my AOL account since ’96 too, I just can’t quit them.
Hey, as long as we’re all together, right?
I have to use everything. PC’s, Linux, Mac OS X, etc. And all the mobile devices. And even some I design and build. It’s what I do. And I’ve worked for or consulted with most of the companies discussed. I have to admit I like them all, and like a lot of the people at each place. Wars over brands is silly. Try them out, use what you like. Whatever.
Wasn’t that one of the arguments for communism or something? They’re more efficient because they have hundreds of thousands of captive workers who cannot innovate or engage in any entrepreneurial enterprises? In contrast the US had a free market system, where people had the freedom to take risks and innovate, create, invent. That’s what led us to become one of the great leaders in the world, producing things like the light bulb and the automobile.
I hate to sound like a Republican, but the US has made operating a business more and more difficult. The taxes, rules, regulations, environmental impact studies, audits, paperwork, employee regulations, make it very undesirable to attempt to engage in any US manufacturing. I’m not advocating an end to all labor protections or unregulated business, but I don’t think the average person understands how burdensome it has all become.
Santorum has pointed out that even if the Chinese workers made the same as US workers, the regulation costs would be much different.
Yeah, God forbid we protect our air and water and the safety of our workers.
It has gone waaay beyond basic safety and environmental concerns. Something is wrong with a system where it takes 8 years just to do the studies to get a factory project approved – much less get it built.
The bureaucracy is out of control. Utterly. Near me, we spent millions of dollars and 3 years getting an EPA study done for re-doing and enlarging a much needed highway exchange. There is NOTHING there but some rocks and dirt. No endangered species, no wetlands, nothing fragile. It turns out that the original plans had an error, and the whole thing needs to be moved over ten feet to avoid some sewer lines or something. The EPA says nooooooo, can’t just amend the study we taxpayers already paid for – will have to start the ENTIRE freaking process over from scratch, and PAY for a whole NEW 3 year study.
Sorry, but that is freaking insane, and there is no reason on God’s green earth it’s necessary, other than “them’s the rules”. One-size-fits-all regulations and requirements are killing us. If I had billions, and wanted to build a manufacturing plant, I sure as fuck would not build it here. Sorry, but I wouldn’t.
You should have seen the fun and games around here when they were trying to build UC Merced.
Environmentalists argued the UC would endanger the fairy shrimp. These are little bitty things that live in vernal pools during the rainy season. The Sierra Club and other environmentalists went to court to stop the state from building the UC at that location. The state won.
The people who funded the lengthy court battle were developers who wanted the state to build the UC near Fresno instead.
Apple products used to be made in the US. They were priced high. Apple got a reputation for high prices because of that. People still today talk about their snobby products and high prices. Apparently they learned their lesson.
I remember when Big Blue and Apple were on opposite sides of the valley, with HP along the bottom of the bay.
Now it’s all software.
I was looking forward to real hardware wars with ballistas, trebuchets, catapults, etc.
I like fuji apples myself.
I love any apple dipped in carmel creme
Sidebar: What’s up with the “designer” winter coats at Macy’s for 3-400 dollars and made in China? Nepal? Vietnam? They REEK of sweatshops. Which I wouldn’t mind if they knew how to fit a busty American woman with a small waist and hip size. The coats I tried on would have housed all of myiq’s klown family, as in circus tent
Some sort of klown plot, I’m sure of it. It’s the coming klownpocalypse.
Klownpocalypse
Apple schnapps
Appletinis
Yum.
http://www.npr.org/blogs/thetwo-way/2012/02/01/146245720/calif-woman-wins-suit-over-honda-hybrids-mileage-claim
wonder what the effects of this law suit will be for hybrid cars
Good post and article referenced. That gets at a really interesting issue. Really large scale manufacturing that needs a large, agile workforce that can change on a dime. It’s hard to imagine that being possible in the US right now.
I think where that could be all US based would be if most of the factory line work were automated, and the 10′s of thousands of jobs needed (vs 100′s of thousands now) were instead the engineers that ran the automated factory. I think that day is coming, and the US could get some seriously interesting work. But of course we could blow that too if we really try.
DC owies
freedom of speech for me, just not for thee
http://www.verumserum.com/?p=37492
That’s their MO. Me, me, me. Such quality of character.
here is more on the story and interview
http://nation.foxnews.com/occupy-dc/2012/02/01/fed-retired-cop-takes-occupy-dc
I am concerned about war between China and India. Their younger generations have more males than females thanks to selective abortion, girls given up for foreign adoptions and even out right murder of baby girls. Just think about all the sexually maturing young males and not enough females to go around. This is a recipe for instability and war.
“A bias in favor of male offspring has left China with 32 million more boys under the age of 20 than girls, creating “an imminent generation of excess men,”
http://www.nytimes.com/2009/04/11/world/asia/11china.html
That was some genius long term thinking on Chinese families part.
Trump to endorse Newt tomorrow
http://weaselzippers.us/2012/02/01/report-trump-to-endorse-newt-gingrich-tomorrow/
Wow. It’s all hands on deck vs Mitt!
Blog pimp:
http://bloghopenchangery.com/2012/02/01/what-were-fighting-for-change/
lost resume
According to Nicholas Kristof and Sheryl WuDunn, two Pulitzer Prize-winning reporters for the New York Times, violence against women is causing gender imbalances in many developing countries.
These authors report that more girls have been killed in the last 50 years, just because they were girls, than the number of males who were killed in all the wars of the 20th century.
They detail rampant gendercide in the developing world, particularly in China, India and Pakistan.
http://en.wikipedia.org/wiki/Human_sex_ratio
jeebus
I know it’s a bit of a chiche, but the workers I’ve seen in Asia are a well educated bunch (from factory floors to offices), not just cheap labor.
Cliche.
http://thehill.com/blogs/floor-action/house/208097-house-approves-bill-to-freeze-federal-worker-pay
backtrack wants to raise their pay
the courts are going to have a field day with this
treasure hunter claims find of WW2 sunken ship of Maine coast. worth
3 BILLION dollars
http://www.bbc.co.uk/news/world-us-canada-16847737
Italian cruse line had earlier accident in 2010
Info withheld
http://www.bbc.co.uk/news/world-europe-16823955
Chinese government and theft of industrial secrets
http://www.newsdaily.com/stories/tre81106n-us-china-usa-dupont/
I think those figures are somewhat exaggerated. In the US, we use technology instead of bodies to do mass productions, China is only triple our population and there are like 2.3 million instead of 230,000 people out of work.
another company with backtrack ties in SEC coverup. Just another day in DC
http://biggovernment.com/capitolconfidential/2012/02/01/questions-arise-about-another-company-with-ties-to-obama-administration-possibly-hiding-information-from-the-sec/#more-421076
I’ve never owned an Apple product but if I wanted one, I’d pay quite a bit more to get a product made in the USA. As it is, I can’t find anything except handmade jewelry that’s made at here. Not retaining our manufacturing base is a national security issue.
As to the size of the factories, we could fill up Detroit again. There’s plenty of housing stock there. Or we could build several different manufacturing centers in different parts of the country.
As to the tech geeks and engineers needed, we train them like Germany does or we supplement our numbers with foreign hires until we can develop our own work force.
The attitude that must change is that manufacturing an item for the least cost is the most important goal. We need a plan for industrial investment that protects our country and its workers.
Not retaining our manufacturing base is a national security issue.
I totally agree.
Dependence on foreign oil is another national security issue.
But apparently we don’t need to worry about any of that as long as the TSA is here to grope seniors, kids, and Senators from the opposition.
Speaking of kids stuck on technology (via Onion):
ROFLMFAO
True Story.