Is Apple making more stuff by themselves?

is-apple-making-more-stuff-by-themselves?

Well, yes and no.

Apple’s DESIGNING its own chips is new (the PowerPC was a joint venture with IBM and Motorola), but they don’t actually MAKE chips. TSMC does. Then Foxconn and several other assemblers put the devices actually together.

Apple USED to build stuff in the US (and for a short time in Ireland), but Chinese manufacturing is more scalable, reliable and infinitely less expensive.

When Trump was president, he was invited to the inauguration of the Mac Pro factory somewhere in the US, but controversy followed because it was more of an assembly line for parts coming (again) from China. Apologies but my memories of the event are pretty vague.

Vertical integration (the fact that a company designs and produces its own products) is very costly. I don’t mean to be cynical, but Apple would never employ the number of people needed to assemble new phones before and during the holiday season just to let them off when demand drops. The optics would be devastating. Foxconn can do that in its factories conveniently located the third world (China, India and Brasil, with a possible expansion to Vietnam), because no one is complaining there.

About services: I hope Apple never outsources THOSE. And considering that it has become harder (not hard) to sell new devices, especially to millennials and zillennials, who want “innovation” without actually knowing what that means, Apple’s focus has been shifting, successfully, towards services. You buy one device, but potentially you can pay a subscription for a lifetime (think about cable TV for previous generations). Small, recurring payments from millions (billions?) of users are the way to fo.

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