Who makes the Apple iPhone?
BA 3320 – 102 International Business
(Tuesday and Thursday 12.30 – 1.45 p.m.)
1. What are the benefits to Apple of outsourcing the assembly of the iPhone to foreign countries, and particularly China? What are the potential costs and risks to China? The benefits to Apple of outsourcing to foreign countries is that labor costs are sometimes lower there, especially in China. Moreover, Chinese subcontractors are able to respond very quickly to requests from Apple and it is much easier to hire engineers over there than in the United States. Besides, many factories in China provide components for the iPhone, that is near, which takes fewer time. On the other hand a potential risk for Apple could be that the subcontractors could use the information they have about the parts they make for Apple. They could sell the information or the parts to other companies. Another thing is that in China the working conditions are poor, they could be charged for that later. Moreover, they have to pay more, because of shipping the parts from all over the world to China.
2. In addition to Apple, who else benefits from Apple’s decision to outsource assembly to China? Who are the potential losers here? The employers and employees of the hired factories in China benefit from Apple’s decision to outsource, because now more jobs are available for them. The potential losers here are people in the United States, because they lose jobs because Apple is outsourcing to China.
3. What are the potential ethical problems associated with outsourcing assembly jobs to Foxconn in China? How might Apple deal with these? One of the biggest ethical problems associated with outsourcing assembly to Foxconn is that the employees have been targeted for their poor working conditions. This is of course an ethical problem, because Apple knows about the working conditions, but has not done anything about it yet. Apple might consider to talk to...
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