Supply Chain of the iPhone

Design - California.

Apple Park cost $5 billion to build and it is where they design every new iPhone. Working conditions are extremely good with a huge park inside for the workers to exercise and be in nature. This can be seen as a very strong contrast to the working conditions of where parts of the iPhone are harvested and assembled. For example, the intensive factories or mines in countries like Chile, Taiwan and China. The headquarters is based in the USA because there are many highly skilled workers within their huge population. They even employ people from all over the world so that they can find the best brains to revolutionise technology even further. Nowadays, they research how the iPhone can be designed to be more sustainable and look more appealing so that they can attract more customers and improve the value of their trade. This is the communcation hub of apple, and it is where everything is decided, and communicated with the rest

Mining of gold and precious metals for the Iphone.

Gold is a key component of iPhones. Apple uses gold for pins, relays, and connectors, cameras, wireless charging coils, and logic boards. 90% of rare earth metals are mined in Mongolia. By mining gold abroad, you are outsourcing labour, which is much cheaper than if you were to mine in places such as America, or Europe. As well as this South America has a much greater supply of gold and other precious metals than most other countries.

Copper mining - Chile.

Most of the copper which apple use is mined in Chile - this is outsourcing as it is cheaper to mine in Chile as there is a lower cost of labour

Tantalum mining - DRC

Mining Tantalum in the DRC is very labour intensive and there is a low cost of labour. In addition to this the DRC is a very corrupt country where there is a real divide between the rich and the poor and there is lots of child labour in the country which has led to Apple getting lots of criticism around where they are getting their materials from. Tantalum is used to manufacture the anodes in smartphone capacitors, the components that store electrical charge.

Camera lens

Sunny optical is the main supplier of the latest iPhones. Apple uses sapphire crystal for its lens covers which are resistant to scratching, but are more susceptible to cracking under pressure than Corning Gorilla Glass.

Production of microchip processors - Taiwan.

The shortages of some products, and the increasing tensions between the U.S. and China, have turned the spotlight onto Taiwan. It makes most of the world's computer chips, including for Apple's products, almost entirely in factories in Taiwan. Microchip processors are instrumental to the workings of an iPhone, and so they need to be high quality, and fully tested. Taiwan is a very developed country, with a highly educated population, and so by outsourcing the production to Taiwan you can keep the costs down, while keeping it high quality.

Assembly - foxconn China.

What apple are doing around basing foxconn in China is that they are outsourcing their production to an EDC where the cost of labour is much cheaper so they can make more money. Foxconn in general is a huge TNC which is based across 24 different countries worldwide and what they do is assemble electronic components which companies like apple buy and then use in the assembly of their iphones. 

Labour flexibility.

Labour flexibility and mobility is the process of having different skilled jobs occurring in different countries, depending on the skill level of the job. It allows firms to respond quickly to changes in the market. A flexible labour market allows employers to make changes in response to supply and demand, minimizing costs, and maintain. Companies can get rid of excess workers which may help prevent them from going bankrupt and could protect jobs in the long term.

Testing of iPhones - Ireland.

Apple has 6,000 employees working in an Apple campus in Cork, Ireland. Here, they have teams working in AppleCare, operations, logistics and testing . The campus is completely sustainable with solar panels and rainwater harvesting for the toilets. They test the phone in four different ways - the sit test (if you sat on your phone with it in your back pocket), the three- point bend test, the pressure point test and the torsion test. 

Transport

Although the raw materials are brought together through various forms of transport including container ships, after travelling by truck to Zhengzhou Airport, Apple ships the final iPhone product mostly by air (Boeing 747s), despite the higher logistics costs, for two reasons. First is the cost of working capital. Ocean shipments take 30 days or more (this creates an incurring a cost on that capital of $0.60 per phone) to cross the Pacific and reach their final destination in Apple’s retail stores, versus just 3-5 days for air freight. To add to this, Apple has created such demand for the iPhone, that it is almost always on the verge of selling out. Why leave the phones at sea for 30 days when you can get it into a customer’s hands and generate almost $600 in net revenue as soon as it arrives? Why risk having a customer appear at a retail store to buy an iPhone, discover they are out of stock, and go buy an Android phone instead?