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Where Do Apple iPhones Come From and Should We Care?

TMCnet Feature

August 13, 2013

Where Do Apple iPhones Come From and Should We Care?

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By Peter Bernstein
Senior Editor

I don’t know about you but my goal as an industry observer/enthusiast is to learn something totally new about something in the technology world, and from anywhere in the world, every day. I get teased occasionally around TMC (News - Alert) about my eclecticism, including my infatuation with sites like phys.org and numerous research universities and analyst sites that are located everywhere but in Antarctica, but I find that flattering. 


In the spirit of learning something new every day, I wanted to recommend an item that appeared on FinancesOnline.com. Along with some speculation about what is coming next from Apple (News - Alert) at its much anticipated September 10 reveal event, they have produced one of the more fascinating infographics of this or any other year. 



Putting aside the facts they we all knew about iPhones not be (to quote Bruce Springsteen) “Born in the USA,” and the dominance of Foxconn as an electronics manufacturer to literally and virtually everyone, to say the least the information about most of the world’s rare metals that constitute much of today’s modern electronics is mined in Inner Mongolia and China (90 percent) was a revelation. Forget about the logistics of having mining so nearby manufacturing, the long-term geopolitical implications of a lack of an alternative source for raw materials - while I knew was a challenge, was one with a scope that I was completely unaware of.

The authors or the infographic also as you can see did a nice job of breaking down the other places in the world where iPhone (News - Alert) components come from. It also highlights the fact that business like politics can make strange bedfellows, and that companies have the ability to compartmentalize their areas of antagonism from ones where cooperation is paramount. In more precise terms, it is why Apple and Samsung (News - Alert) may be beating each other’s brains out in courtrooms and in front of regulatory agencies and governments heads around the world over their finished products, but reality is they need each other when it comes to fabrication of those products. In this case Apple memory chips made by competitors, and competitors need Apple’s business to be profitable. 

The other two pullouts that were new information to me and might be to you were the estimates that only $2-3 would be added to the retail cost if iPhone manufacturing were moved back the U.S., and the number of so-called “Apple Generated” jobs there are in the U.S. (598,500 in 2012). Both were surprises in that if asked to guess prior to looking at the infographic I would have said the price gap on manufacturing was much larger and the number of jobs smaller. Indeed, for all of the political talk about re-shoring production, the overall jobs numbers speak volumes about what should be the context for such discussions, and provide good guidance as to the decisions not just Apple but all tech companies make constantly when looking at their logistics and profit maximization considerations. In two words, “who knew?”

Many years ago there used to be a men’s clothing store in Union, New Jersey named Dennison Clothes. It had two famous sayings that still resonate although the store is long gone. They were, “Time Waits for No Man!” and “Money Talks, Nobody Walks.!” These are both “Apple-cable” in looking at the Apple supply chain and the role all of the stakeholders play in getting us our iPhones.

In answer to the rhetorical question posed in the headline of this posting as to whether we should care, the answer is actually two-part. First we should know and then based on context and perspective we should care personally, professionally and as citizens of whatever country we live in.




Edited by Stefania Viscusi


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