Late last year, Apple started producing Mac computers in the U.S. again. Suddenly talks about reshoring was hot, and more American companies—including General Electric, Michigan Ladder and Wham-O— showed intent to open their U.S. factories again after some prodding from President Barack Obama to bring manufacturing jobs back home,
Many reasons have been laid down for reshoring, namely, increasing Chinese wages, increasing shipping rates, and political pressure to help the country get back to its feet.
What about Apple? Are there any real plans for reshoring its operations? Well, for the iPhone—its flagship product—maybe not in a long shot.
The iPhone is being sandwiched between the high-end market by Samsung and HTC and on the lower end by Huawei and other Chinese clones. In fact, this year marked the first time in a decade that Apple sales contracted, while Samsung kept a strong 33.1 percent market share to Apple’s 17.9 percent, according to research firm Strategy Analytics.
Interestingly, rumors have it that Apple is testing larger screens for a new breed of iPhones and iPads to go head-to-head with the large-display niche market of Samsung, HTC, and Huawei. These device makers have had expanded the smartphone market—to Apple’s detriment—to include bigger screens or “phablets,” a crossover between phones and tablets. A budget iPhone is also making the rounds of technology chatter; Apple is finally considering breaking its one-size-fits-all design strategy.
In short, whether Apple will be looking to expand its market or keep costs down, outsourcing is at the heart of its operations. As it explores the possibility of extending its product line to grab back some market shares, it will rely on its offshore supply chain to deliver the goods at low cost and fast turnaround.
An infographic published by FinancesOnline.com illustrates the extent of the iPhone global supply chain. Rare earth minerals from inner Mongolia; LCD panels from Japan, Korea and Taiwan; gyroscope from Europe; chipsets and batteries from its arch rival, Samsung; and all parts assembled in China.
But despite these offshore operations, Apple claims to have created about half a million jobs in the U.S., mainly in retail, the IOS app community, and derivative businesses. And despite being perceived as made “elsewhere,” the iPhone remains an American product, the result of true-blue American ingenuity. The A6 brain, engineering blueprint, design plan, crystal panel, and marketing are hatched and being done in the U.S.
Reshoring talks aside, don’t expect too much from Apple to bring back its full assembly plant to the U.S. More than ever, it needs to stay abreast (if not ahead) of the competition and that means taking advantage of what its Asian competitors have had as an advantage in the first place—the scale and speed of Asian factories to create new products. In the end, the iPhone is the only American brand to stand up to a market slowly being dominated by Asian smartphone giants and the theater or operations, Apple knows, is in Asia.