Doom: The Politics of Catastrophe by Niall Ferguson review
(Evening Standard) – From plagues and volcanic eruptions to the current Covid pandemic, mankind has always been faced with catastrophes.
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How Apple tied its fortunes to China
From Patrick McGee: The company spent two decades and billions of dollars building a supply chain of unprecedented sophistication. Now, a reckoning is coming.
In 2007, Nokia had 900mn users. Its market dominance seemed so great that Forbes ran a cover story on the company asking “Can anyone catch the cell phone king?” The same year, Apple launched the iPhone.
Sixteen years and 1.2bn users later, the story of how the Finnish handset maker got blindsided by the iPhone is well known. Nokia, the story goes, didn’t have enough software savvy to keep up with visionary Apple co-founder Steve Jobs and design whizz Jony Ive.
But the cellphone’s multitouch, full-screen features were not Apple’s only advantages. The company was also outmanoeuvring Nokia on hardware and production before the iPhone even went on sale. And it did so by making a substantial bet on China and its manufacturing sector.
Supply chain researcher Kevin O’Marah vividly remembers his confusion when, in mid-2007, Apple vaulted from out of nowhere into the No. 2 spot of the Supply Chain Top 25, an annual ranking of the world’s best-run corporate supply chains.
“Everyone was shocked,” he says. “It was like, ‘What? This doesn’t make sense. They have a terrible reputation.’”
The supply chain ranking turned out to be an early indication of a profound shift in operations at Apple, which held the No.1 spot for the next seven years. In that time it became the world’s most valuable company, while placing itself at the centre of geopolitical tensions.
O’Marah began to learn that Apple was not really “outsourcing” production to China, as commonly understood. Instead, he realised that Apple was starting to build up a supply and manufacturing operation of such complexity, depth and cost that the company’s fortunes have become tied to China in a way that cannot easily be unwound.
Over the past decade and a half, Apple has been sending its top product designers and manufacturing design engineers to China, embedding them into suppliers’ facilities for months at a time.
These Apple employees have played integral roles co-designing new production processes, overseeing the minutiae of manufacturing until things were up and running, and keeping close tabs on suppliers to ensure compliance.
Apple has also spent billions of dollars on custom machinery to build its devices, developing niche expertise that its rivals did not even know about, let alone compete with.
It has transformed the company and the country. “All the tech competence China has now is not the product of Chinese tech leadership drawing in Apple,” O’Marah says. “It’s the product of Apple going in there and building the tech competence.”
These operations played such a salient role that the unassuming character behind them, chief operating officer Tim Cook, would succeed Steve Jobs as CEO in 2011. It was Cook who shifted Apple’s production from the US to China, where he established unparalleled efficiencies that underpinned Apple’s ascent.
Continue reading on ft.com.
Patrick McGee is a compelling keynote speaker, bringing over a decade of global journalism experience from the Financial Times and The Wall Street Journal. His award-winning reporting on Apple, electric vehicles, and emerging technologies offers audiences unparalleled insights into the forces shaping our digital future. As the author of Apple in China, he delivers a deeply researched, behind-the-scenes look at how the world’s most valuable company became entwined with America’s biggest rival. With his engaging storytelling and sharp analysis, Patrick provides event attendees with thought-provoking perspectives on technology, business, and global markets. Contact WWSG for Mr. McGee’s speaking availability.
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