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Apple’s global manufacturing operation is the envy of the consumer tech industry, utilizing rigid quality assurance standards and exploiting advantages of scale to deliver precision-crafted products to markets across the world in a fast and efficient manner.
It’s also been the subject of a great deal of scrutinyin recent years, as accusations of abusive and unsafe labor practices by the company’s Asian manufacturing partners have drawn attention to the blood, sweat, and low pay that underpin the availability of the latest iPhones, iPads, and Macs.
As Apple battles the rising tide of Android-based mobile devices, it will surely continue to seek any advantages it can find in component-sourcing, manufacturing, and distribution. And on the global stage, Chinese factories have an unmatched combination of flexibility, low labor cost, and the ability to ramp volume production quickly. What’s more, a whopping 90 percent of the world’s rare-earth minerals used in electronics components are sourced from Chinese-controlled territory.
What this all means is that there’s unlikely to be a big shift away from Apple’s reliance on China-based manufacturing, currently responsible for the assembly of 85 percent of the iPhone 5s sold on the world market. There are just too many economic advantages to running consumer electronics manufacturing operations in the country, regardless of the ongoing concern among many Apple customers about working conditions at Chinese factories.
Yet Apple has begun initiatives to “reshore” product manufacturing to the U.S., most notably announcing last December that it is in the process of moving some production of its Mac computers back home in 2013. In recent times, other tech giants like Hewlett-Packard and Lenovo have also started up U.S. assembly operations for certain products.
And as this instructive infographic designed by Ruby Media for FinancesOnline.com shows, Taiwanese contract manufacturers like Foxconn and Pegatron, which operate the mainland China-based factories which have generated such controversy, aren’t the only links in Apple’s manufacturing chain. Various parts of the iPhone 5, it turns out, are made in the United States, South Korea, Italy, France, and other countries.
Does that mean Apple and other tech giants which contract out manufacturing to Asian partners will start shifting their operations out of China and into countries where workers earn higher wages and are more protected from abuse? That’s already happening, but on a pretty small scale so far—as long as Apple is selling 30 million+ iPhones per quarter, we probably won’t see any meaningful changes anytime soon.
Courtesy of: financesonline.com