How the U.S. Lost Out on iPhone Work
As an engineer, this quote in the New York times about the iphone production in China blows my mind:
“Another critical advantage for Apple was that China provided engineers at a scale the United States could not match. Apple’s executives had estimated that about 8,700 industrial engineers were needed to oversee and guide the 200,000 assembly-line workers eventually involved in manufacturing iPhones. The company’s analysts had forecast it would take as long as nine months to find that many qualified engineers in the United States.
In China, it took 15 days.”
What Apple has done with the iPhone and its other products is utilize China’s economies of scale from the production of raw materials to assembly in a way that minimizes time to market and maximizes profits. China simply has more engineers, more workers, more capital to build production facilities quicker, and the ability to make changes at light speed. Again, as an engineer, I stand in awe at what Apple has accomplished through this strategy.
The old argument that “work goes to China because they do it cheaper” is just not the whole story. The same reasons listed above for why production is more efficient is why it ultimately makes Apple more money, not just because of cheaper labor. Apple did the cost-benefit analysis and it was a no-brainer. They engineered a production system utilizing the realities of the global economy. This is how 21st century technology gets into our hands and is affordable for us middle class chumps. Otherwise, we’d still be walking around with a Nokia or a Motorola Star-Tac.
Outsourcing production is old news, but what this article describes goes way beyond losing a few American jobs to Asia. This is a fundamental change to a production philosophy which correlates to a fundamentally different answer to the question, “How does America benefit?” Everything is done in China, but we are getting unbelievable, affordable technology in record time. That is Apple’s answer. And we Americans are buying it – in record numbers.
Now it may sound like I am uncritically celebrating this triumph as an engineer and Apple user. Sure, the iPhone is a fantastic piece of technology and how it is produced is just as fantastic. But as a person that cares about our culture and how it is shaped, I can’t help but wonder what this subtle shift is doing underneath the surface. The iPhone is less than five years old! In that blip of time, a company worth more than the entire US auto market has definitively answered a complex political and social question. They have said, “Keeping work in America is not as important as giving us the best technology faster and cheaper.” Pop culture eats it up because it drives entertainment consumption forward. Other businesses look at the answer and immediately begin to copy. The avalanche has started and nothing is going to stop it.
What do our politicians say in response? I doubt they really know what to say or how to answer. The exchange between Steve Jobs and President Obama on the first page of the article is classic and telling:
Why can’t that work come home? Mr. Obama asked.
Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back,”
No, the jobs are not coming back, because the question has been answered. We don’t really want the jobs. We want the goods. If I were in politics and reading this article, I would be considering a career change.
This should be a wake up call to Americans of all political stripe. Maybe the enemy isn’t the other guys and their agenda. Maybe the enemy isn’t Apple and their profits. Could it be that we have been waiting for some company or politician or pop icon to give us the answers? Maybe the enemy is us.