An article titled “How U.S. Lost Out On iPhone Work” published by The New York Times in January 2012 has raised my interest in searching the reasons that why Apple outsourced their manufacture to Asian countries.  This research has later offered me some interesting insights into Apple’s supply chain as well as its cost structure.

I used to think, cheap labor in Asian countries is the only reason that why this decision was made in consideration to save money on wages. Yet, it seems that population density, employment rate, and literacy rate also play a role.

In Asian countries, it is not hard to hire over a thousand people within a short period of time. Thus, provides Asian countries the opportunity to be the most productive in manufacture products. On the contrary, it is difficult to find large work force with high literacy rate to be willing to assemble products with a low wage.

Therefore makes Asian manufacturers and suppliers to provide better qualities and services as they are very productive and efficient. As Apple extensively outsourced their manufacture in Asia, it suggested that Apple might be using a cost-driven business model as it focus on minimizes cost whenever possible.

References:

DUHIGG, CHARLES, and KEITH BRADSHER. “How the U.S. Lost Out on IPhone Work.” The New York Times Business Day. N.p., n.d. Web.<http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html>

Photo from:  “Why Does Apple Manufacture IPhone in Asia?” IPhone Hacks IPad IPod Touch and IPhone Blog. N.p., n.d. Web. 08 Oct. 2013.  <http://www.iphonehacks.com/2012/01/apple-manufacture-iphone-asia.html>