Why Does Apple Manufacture in China?

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Foxcon Apple's Chinese Manufacturer

If you take a look at the back of your iPhone, iPad, or any Apple product you have, you’ll see ‘Assembled in China’. Many people wonder why Apple has chosen to outsource all of its production overseas, specifically to China. Many believe Apple are just out to make tons of money and that’s the sole reason for the relocation…but it’s not the truth.

Why? Why can’t Apple’s gadgets be assembled in the United States? Or in general terms, why can’t international consumer electronics and computer businesses do their manufacturing work internally, helping create local jobs and boost its existing economy?

China can support Apple’s high demands

After tons of research, The New York Times published a very informative report which covered interviews with both former and current executives at Apple. The reason behind the relocation itself is quite simple — iPhones aren’t manufactured in America because they simply can’t be. Put simply there’s not enough manpower to support the manufacturing of Apple’s products.

The factory in China where Apple products, specifically iPhones, undergo final assembly has approximately 230,000 workers. In the US, there are only 83 cities that have the same population as this factory’s number of employees. Meaning the number of possible workers in the US is not enough to cover Apple’s needs.

In China, an estimated quarter of their workforce lives in company-owned dormitories. These barracks are located on factory property. Many people are living and working at the factory. Such jobs are in high demand in China, and they can hire many people overnight. These examples prove that the measure, speed, and efficiency of Chinese manufacturing surpass anything the US is presently capable of.

iPhone being manufactured in China

Assembling locally would affect consumers most

In addition to the manpower China offers, most of the raw materials used to make Apple products are also manufactured overseas. A lot of them are within a short distance of the final assembly plant. Shipping those components to any US-based factories would mean higher costs and potentially even experience manufacturing delays.

In terms of traditional outsourcing and manufacturing, it also costs more money to manufacture in America. This is because workers need to be paid more. There are also expenses on worker benefits, insurance and higher taxes. Since companies want to generate revenue, added costs are inevitably transferred on to the consumer in increased prices for goods. In simpler terms, this would mean that American-manufactured Apple products would cost more.

China is the best fit for Apple 

Apple’s decision to outsource its manufacturing to China is really about who can build the most number of Apple products within the shortest amount of time. This also meant that China is able to remain flexible and immediately adaptable to the needs of Apple. In a report, an Apple executive also stated that the US no longer has the people with the skills that they need.

One particular example would be the release of the iPhone. There is a huge demand for it, and Apple knew it needed to be finished as fast as possible. Apple was aware that it wasn’t attainable in US manufacturing, and that it would result in delays. With this, they sought out the service of Chinese factories, and they were able to quickly finish the tasks.

This is because in China, manufacturers can ask a large number of engineers to work on the required manufacturing overnight. As they have an abundant supply of labor force, this allows them to finish a large capacity of workload quickly. The US simply cannot employ 250,000 workers overnight. This makes China a flexible and capable supplier.

Yes, Apple is reaping the financial rewards. But this is because China has an abundance of hard-working people with the right skills. They are willing to accept demanding jobs, such jobs are standard to millions of Chinese, including workers who have technical skills.

PS: If you’re interested in learning more about what China is doing to improve it’s manufacturing industry, check out my recent post ‘Why We No Longer Fear ‘Made in China” here.

 

About The Author

Giovanni Pino
Giovanni's passion and interest in global sourcing and trade gives him insight and understanding that most would miss. His love of research mixed with his background in business makes for an interesting read.
Comments (3)
Michele Pagano / December 21, 2019

I love my I pad and I phone, but I will no longer buy products that are made in China. While no country is perfect, the human and animal rights abuses that go on in China are something that I can no longer ignore. If I have to go back to a flip phone I will. At least I will be able to sleep at night.

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Mary C. Delany / March 25, 2020

It All seems so simple doesn’t it. It’s so quick! It’s so cost effective! The workers are all so skilled and at our beckoned call! How can we say no to that!? Maybe a bit of historical knowledge and understanding might be good for Apple’s breakfast, then for second breakfast, perhaps some character building, followed up by a full spread picnic lunch of foresight and humility, then a dinner of how to tell right from wrong and make decisions based on higher causes than base greed and gluttony, like choosing NOT to work with humanitarian and environmental wastelands, like choosing to make less money in order to prevent the whole planet from becoming a humanitarian and environmental wasteland! Then! Let’s get Apple some future desert, perhaps some virus from communist China, and the cure & vaccine are both only manufactured in communist China! You see, preparing for true success involves so much more than simple things, so much more than thinking “wow, we can do so much better if we take advantage of these desperate cheap labor humans. Preparing for true success involves saying NO to cruelty and quick fixes, NO to degradation and offers you can’t refuse, NO to selling your soul and betraying your own beginnings. Preparing for true success means making sure there are no weaknesses that invite danger, disease,, corruption and thuggery into the homes and neighborhoods of America, and yes … even into your children’s bedroom, even if it means you won’t make as much money, real fast!

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sapilo / April 9, 2020

Apple Inc. is an American multinational technology company headquartered in Cupertino, California, that designs, develops, and sells consumer electronics,computer software, and online services. It is considered one of the Big Four technology companies, alongside Amazon, Google.

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