Nowadays a lot of
people all around the world have at least one device from Apple or dream of
having one.
This is no coincidence
as their devices are stylish, solid and user-friendly. But to make them that
way, Apple had to travel the globe and find reliable partners. They benefit
from the international division of labour to develop, design, assemble and sell
their products. Today’s report will retrace Apple’s devices’ journey, from
development to sale.
Developing Apple products
This American company
was first created in 1976 in Cupertino, California by two young entrepreneurs -
Steve Jobs and Steve Wozniak. Since that time, the company has continued to
prosper and to win over people’s hearts. Among the key products made by Apple,
we can find the iPod, iPhone, iPad, MacBook, and Apple Watch among others. So,
as the headquarters of the company are in California, all these devices are
developed there, in Silicon Valley.
Assembled vs Manufactured.
If you turn your
iPhone over, you will see an inscription that reads “Designed by Apple in
California”, but if you think that the whole device is made there, you are
wrong - 90% of the components come from outside of the US.
Broken down, the
geographical provenance of the products looks like this:
- From the USA: audio chips, camera, chips for 3G/4G/LTE networking, glass screen, touch screen controller, Wi-Fi chip. Apple works with American multinational companies such as Cirrus Logic, Qualcomm, Corning, and Broadcom.
- From Europe:
accelerometer, gyroscope, processor, wi-fi chip.
Its European partners are Bosch, Intel, STMicroelectronics. - From
Asia: battery, camera, compass, flash memory, LCD screen, A-series processor,
touch ID.
The Asian manufacturers are Samsung, Sunwoda, Sony, AKM Semiconductor, Toshiba, Sharp, LG, TSMC, Xintec, Murata.
So, as we may see,
Apple doesn’t manufacture all the components itself but cooperates with
companies that are specialized in a specific field. Sometimes those companies could
also be direct rivals of Apple on the market. It is the case of Samsung, Lg,
Toshiba which also sell mobile phones, personal computers, monitors etc.
Moreover, Apple has decided
to relocate the assembly of its devices to countries with cheap labour costs
in order to save money. It works with two companies, Foxconn and Pegatron which
are located in Taiwan, China, Malaysia, South Korea, Singapore and the
Philippines. People who work there are low-skilled, but the process of assembly
doesn’t require high-skilled workers.
Sale
This part focuses on
how Apple sells its products. There are multiple ways in which the tech-giant
sells:
- Apple Store online: this is the official online website where all Apple devices are presented with their description and official prices. It has been selling Apple products all around the world since 2008. This way of selling is the most comfortable for its clients because they don’t even need to quit their home to purchase a new Iphone, IPad or MacBook.
- Apple Store shop: is a physical shop where you can find iPhones, iPads, Mac Books, and can touch and test them. There are 402 Apple Stores in the world, 250 of which are located in the US and 85 in Europe. So we may see that Apple’s main clients are American consumers.
- Retailers: Apple Shops, Apple premium resellers, Apple
Solution Experts Creative are retailers of Apple products. Usually, they have
their own Apple stand in digital product stores all around the
world.
There are other points of sale, such as in shops like supermarkets, mobile phone boutiques or on online shopping websites such as Amazon, Ebay, Aliexpress for example.
So, conversely to the
idea that Apple devices are made in China, we can see that many more countries
are involved in their manufacturing and that this process isn’t as simple as
what we may think. So, maybe that’s why Apple products are so expensive – just
imagine how much money the company spends on transportation!
Yana L.
Sources:
1) https://www.lifewire.com/where-is-the-iphone-made-1999503
2) http://apple-lsw42.e-monsite.com/pages/la-place-d-apple-dans-le-monde.html
3) http://appletpeses.e-monsite.com/pages/strategie-territoriale.html
Hello Yana,
ReplyDeleteThank you for your article, Apple is a clear example of the international division of labour.
After reading your article, I find it funny to consider IPhones as American products because at the end, except for its design, almost everything is produced outside the American territory.
When we think about it, one of the disadvantages of the international division of labour is that it tends to trick consumers because if we do not pay attention to the description of products we may believe it is French whereas it is 90% Chinese or German for instance.
Do you think consumers pay attention to the origin of their products or at the contrary, they do not because they know that, due to the international division of labour, a product is rarely 100% produced in one country?
I cannot wait to know your opinion.
Thank you in advance.
Floriane.M.
Hello Floriane,
DeleteThank you for your comment. I think that people believe the inscription on their products. People tend to trust devices which are made in Europe or in the USA, considering them to be reliable. They are even ready to pay more money for an Iphone which they consider to be produced in the USA instead of a Xiaomi smartphone which is manufactured in China. Nevertheless, my article prove that Europenean and American multinational companies delocalize their production process to Asian countries in order to reduce their operational costs and in this way increase their margins. So people should be more aware about this fact before buying their products.
Yana
Hi Yana,
ReplyDeleteThank you for your article, it is very interesting.
Nowadays, a lot of people worry about climate change. We all know the consequences of transportation on climat change. Do you think that the fact that Apple spends a lot on transportation could be an issue for the company in terms of customer demand?
Thank you in advance,
Vita V.
Hi Vita,
ReplyDeleteYour comment if very interesting and I think that it might be an issue for the company in future, because as you said people become more aware about the climate change. Nevertheless, I think that nowadays people don't have a lot of information about Apple's manufacturing process, and thus it doesn't influence the demand. Moreover, I guess that people are looking for low prices for their mobile devices, so perhaps they will be more willing to spend less money than worrying about the planet.
Best Regards,
Yana
Hello Yana,
ReplyDeleteThank you for your article. As you may know, the price of the latest iPhone is cheaper than the previous one even with the US-China trade war. Do you think that the cheaper price is due to a lower quality material or did Apple found new suppliers in order to produce more and cheaper?
Clinton T.
I am thankful to you for sharing this post.
ReplyDeleteIphone screen replacement service Adelaide