Charles Duhigg and Keith Bradsher of the New York Times have written an excellent article about why Apple makes iPhones and iPads in China instead of the United States.
One of the key points is this:
Chinese factories are far more nimble than American factories.
The story Duhigg and Bradsher used to illustrate this will only add to the iPhone lore.
Just over a month before the first iPhone was to be released in 2007, the authors report, a frustrated Steve Jobs summoned his senior team.
Steve had been using a prototype iPhone for a few weeks, carrying it around in his pocket. When his lieutenants were assembled, he pulled the prototype out of his pocket and pointed angrily to dozens of scratches on its plastic screen.
People would carry their phones in their pockets, Steve said. They would also carry other things in their pockets–like keys. And those things would scratch the screen.
And then, with Apple just about to ramp up iPhone production, Steve demanded that the iPhone’s screen be replaced with unscratchable glass.
“I want a glass screen,” Steve is quoted as saying. “And I want it perfect in six weeks.”
The glass itself would come from Corning, an American company. But the only way for Apple to meet Steve’s deadline would be to find an empty glass-cutting factory, a huge amount of glass to experiment on, and a team of mid-level engineers to figure out how to cut the glass into millions of screens.
An executive at the meeting knew that the only place Apple might be able to find these things would be in China. So he flew to Shenzhen, where a bid for the work quickly arrived from a Chinese company.
Before they even won Apple’s business, the Chinese company started building a new factory building in which to cut the glass. (The Chinese government was providing subsidies, and the company took advantage of them–“just in case.”) The company provided Apple with a team of cheap engineers, as well as spare glass for Apple to experiment with, the latter for free. The company’s engineers were housed in dormitories, so they were available to Apple 24 hours a day.
Apple hired the company to cut the hardened glass for the screens, and after a month of experimentation, the engineers figured out how to do it. They quickly sent the first shipment of screens to Foxconn’s assembly plant in Shenzhen, where they arrived in the middle of the night. Foxconn’s managers woke up thousands of workers and immediately began assembling iPhones.
Three months later, Apple had sold 1 million iPhones. Four years later, Apple has sold ~200 million of them.
As the Apple executives who spoke to Duhigg and Bradsher for their article make clear, there is no way American manufacturing companies could have met this timetable.
The end-to-end process of building the iPhones, Duhigg and Bradsher report, required 8,700 mid-level engineers. In the United States, Apple estimated, it would have taken 9 months to hire this many engineers. In China, it took 15 days.
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