
Apple in China
A new book about Apple reports how China made it possible for Apple to build world-class products without building it themselves. But the cost was the complicated relationship with China that we see today.
In the past 20 years, most books about Apple have focused on Steve Jobs, the iPhone, and Sir Jony Ive. This excellent new book by Patrick McGee is different. It tells the story of how Apple can build world-class products without manufacturing any themselves. It's the story of how Apple made China, then, how China made Apple. It's the story of how Apple became intricately linked to China. Never before has this modern business tale been told with such detail and breadth. It's a page-turner from start to finish.
Most Western companies see a path to profit by outsourcing production to cheap labour. Not Apple. Apple saw the infinite resources, the low cost, and the lack of regulations as a path to innovation. Apple did not move manufacturing to China to save costs; they moved manufacturing to unleash innovation that was only possible there.
Workers came in buses from the Chinese countryside. Engineers came in First Class flights from Cupertino. Foxconn, a Chinese manufacturer, saw the potential of working with Apple at any cost. The close collaboration between Apple engineers and Chinese manufacturers made the products Designed For Manufacturability (DFM). Apple out-innovated its competitors with better design and more efficient manufacturing.
The journey into China did not stop at factories. The combination of increasing demand for iPhones and a lack of supply (Apple had only one store in China) served as a lesson in market economy. The unmet demand led to counterfeits, grey imports, and shady business. The iPhone had become a status symbol; one person sold his kidney to buy the latest. China also became a critical market for Apple.
The Cupertino-China knowledge transfer did not stop at the factories. It spread into China as Chinese manufacturers hired ex-Apple factory workers, who had the knowledge. And one day, the Chinese manufacturer Huawei could build phones good enough to compete with Apple; at that time, the Chinese manufacturers had already outcompeted RIM/Blackberry, Nokia, and Motorola in the mobile phone market. It was the US sanctions in 2019 that prevented Huawei from competing with Apple; they could no longer access Google Mobile Services or get access to advanced microchips from TSMC.
But the relationship with China got complicated. Protests against worker conditions and salaries intensified. Global trade and politics did not help. Lately, Apple has started to move some manufacturing to India and other places. But most products remain Designed by Apple in California, Assembled in China.
Mr. McGee is first a reporter and second an author. The writing style is straightforward reporting and easy to read. But it's reporting at its best. Apple in China stands on its own, but is also complementary to "Chip Wars" by Chris Miller and "Build It" by Tony Fadell.