Why Apple Don't Build Their Own Stuff

The days where companies own factories that put out their stuff is over. Thanks to globalization, companies like Apple managed their vendors instead owning factorie that bear their name. Posted by erwinkarim on 3:17 PM, February 25, 2021 Last updated on 3:19 PM, February 26, 2021 Filed in: iphone, global manufacturing, making stuff,

It is the paradox of Apple. Apple is one of the largest seller of smartphones in the world, but Apple does not directly own any factory that makes. A few people wondered why Apple buys it screens from Samsung, LG and Sharp which are competing in the smartphone space. This is because Apple is in business of selling iPhone and the Apple ecosystem, not screens.

The iPhone 12 Pro Max could have around 1000 individual components that are built from a dozen vendors and manufactured by a single vendor. This plus the logistics of distributing it around the globe. This is the magic of globalization.

Apple sells over 200 million iPhone per year. They do come in various sizes but it’s just around 2–3 sizes. When you are selling 200 million iPhones, you need to make 200 million iPhones. You can either own the factory that build the phones like how Dell does with their computers or get a third party to do the manufacturing for you.

Furthermore, making a modern polished smartphone like the iPhone 12 Pro Max is a complicated process. There is easily 1000 individual components that makes up the final product. Because of the complexity and Apple demanding nature in terms of quality and quantity, outsourcing the manufacturing of the final product is a prudent approach. All Apple needs to do is to manage their vendors, the supply chain logistics and also quality control along the way, which by itself is an amazing feat of the mordern globalized world where everything must work, just in-time.

Foxconn is one of the most famous Apple supplier making all the iPhones and such. But it is a cog in Apple global manufacturing machinery. A major cog, but a cog nevertheless.

Both have its advantages and disadvantages, but for Apple, their advantages outweighs the disadvantages. When you want to make 200 million to 250 million iPhones, you have a lot of power with your manufacturer. Apple like other US companies applies the “smile” principal. The design and the sales where the money is maximized and the manufacturing where the cost is minimized.

The advantages for Apple in using Foxconn to build the iPhone and Samsung to supply the screen is flexibility. If Apple does not like Foxconn way of doing things, Apple can take their business away. Just like how Apple apply workers living and dignity standards to Samsung as well.

Building a laptop involves manufacturing hundres of components world wide and shipping them around the globe in a timely manner to be assembled in a faraway place and redistribute it around the world. Globalization at work.

Samsung might sell around 250 to 300 million phones per year, but it sells around 500 million screens per year because Apple bought their screens. Imaging your customer decided to go to LG with their order of 200 million plus screens, how bad does your year is going to look like? So Samsung might willing to cut prices to keep Apple’s business and others might entice Apple by offering better value. In the end, Apple have bargaining power because of the volume it commands.


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Some of Apple Suppliers

Neodymium magnets Chemical Company metalilc semi-finished product and classic metal processing
Supplier Potential supply item
3M Company Things
AAC Technologies Acoustics, Precision Processing, Haptics, Optics, Sensor & RF Antenna
Advanced Semiconductor Engineering Semiconductor packaging, testing and electronic manufacutring
Alps Electric Company Electronic components for phones and other devices
Amkor Technology Limited Chip packaging
Amphenol Corp Eletronic and fiber optic connectors, cable and interconnect systems
ams AG Sensor and sensing solutions
Analog Devices Inc Data conversion, signal processing and power management
Artesyn Embedded Technologies Power conversion and embedded computing
Asahi Glass Glass for display
Asia Vitals Components Cooling, casing, hinges, camera and touch panel
AT & S Austria Technologie & SystemTechnik PCB manufacturing
Biel Crystal Back Glass for phones
Boyd Corp Engineered materials and thermal solutions
Boardcom Limited Semiconductor and infrastructure software
BYD Electronic Hanset components and assembly
Career Technology Circuits and related assembly
Catcher Technology Chassis
Cathay Tat Ming Precision Metal Products High Precision Hardware Parts
CCL Design Labels, precision die cut, brand enchancement and protection
Cheng Loong Paper packaging
Cheng Uei Precision Company ??
Chengdu Homin Tool, Die and Mold Making
China Circuit Technology Printed Circuit Board
CN Innovations Metal and glass processing. Touch panel
Coilcraft Inc. Inductors and transformers
Compal Electronics Inc. Orignal Design manufacturer
Compeq Manufacturing PCB manufacturing
Corning Inc. Specialty glass, ceramic and other materials
Cosmosupplylab Ltd. Eletronic parts and electronics communicatons equipment
Cowell E Holdings Inc. Camera module and optical components
Creland Technology Ltd. ??
CymMetrik Enterprise Labels, Structural components and enclosure decorations
Cypress Semiconductor Semiconductor components
Darfon Electronics Notebook keyboard and precision components
Delta Electronics DC industrial, computer fans and switching power
Derkwoo Electronic Mobile Phones components, display chassis, ABS
Dexerials Corp. Functional materials
Dioes Inc. Semiconductor
DSM Engineering Plastics High performance plastics
Dynapack International Technology Storage battery manufacturing
ECCO leather B.V. Leather manufacturer
Flex Ltd. Contract manufacturer
Flexium Interconnect Ltd. Flexiable Printed Circuit Board
Foster Electric Co. Ltd. Speakers and headphones
Fujikura Ltd. Communication cables and network equipment manufacturing
Fuyang Technology Corp. AGV (automated guided vehicles), RGV logistics
Genius Electronic Optical Ltd. Lens
GoerTek Inc. Acoustics components
Golden Arrow Printing Ltd. Printing and packaging
Guandong Ellington Electronics Tech Printed Circuit Board
Hama Naka Shoukin Industry Microscrew
Henkel AG Adhesive Technologies, Beauty and Laudary
Hi-P International Industrial mold
Hirose Electric Interface connectors for sensing devices
Hitachi Ltd. Conglomerate
Hon Hai Precision (Foxconn) Actually Foxxconn, electronics contract manufacturer
Ibiden Plastic packaging and PCB
II-VI Inc. Optical material and Semiconductor
INB Electronics ??
Infineon Technologies AG Semiconductor manufacturer, memory chips, etc
Intel Corp Semiconductor, CPU, etc
Interflex Co. Flexiable Printed Circuit Boards
Intermedia Inc. Online business communication services
Inventec Corp. Computer manufacturer
J.Pond Industry ??
Jabil Inc. Manufacturing services
Japan Aviation Electronics Industry Electrical connectors
Japan Display Inc. Display technology
Jiangsu Changjiang Electronics Semiconductor system integration packing and test
Jilin Liyuan Precision Manufacturer Aluminum products
Jinlong Machinery & Electronics Resource exploitation, iron and steel production, shipbuilding and electrical machinery
Jones Tech Material Solutions
JXTG Holdings Owned by Eneos, petroleum and metals Conglomerate
Kantatsu Co. Ltd. Design, develop and manufacture electronic components
KEMET Corp. Capacitor Technology
Kinsus Interconnect Ball Grid Array
Knowles Corp micro acoustic, audio processing, and precision devices
Kunshan Kersen Science & Tech Precision metal structural components
Kyocera Corp Ceramics and electronics manufacturing
Laird PLC Electronics and Technology
Largan Precision Camera lens module
Lens Technology Ltd. Lens product
LG Chem Chemical manufacturer
LG Display co. Display manufacturer
LG Innotek Electronic component manufacturing
Lite-On Tech Computer components
Longwell Co. Power cord, cables, connectors and power adapter
Luen Fung Group Precision metals
Luxshare Precision Industry Electronic Component manufacturing
LY Investment (HK) Investment company
Marian Inc. Flexiable Components manufacturer
Maxim Integrated Products Analog and mixed-signal integrated circuits
Merry Electronics Co. Ltd. Electroaucoustics
Microchip Tech Inc. Microcontroller, mixed-signal, analog and flash-IP integrated curcuits
Micron Tech. Computer memory and storage
MinebeaMitsumi Inc Machinery and electronics component
Molex Inc Electric, electronics and optical connectors
Murata Manufacturing Manufacturer of electronic component
MYS Group Co. Ltd. Cardboard and plastic packaging
Nanya Tech Corp. Dynamic RAM
Nichia Corp. Chemical engineering and manufacturing
Nidec Corp. Electric motors
Nissha Co. Ltd. Printing technologies
Nitto Denko Corp. Tapes, vinyl, LCDs, insulation and others
NOK Corp. Oil Seal
NXP Semiconductor Microcontroller, processors and sensors
O-film Tech Co. Ltd. Electronic components
ON Semiconductor Corp. Semiconductor supplier
Pai Shing International Packaging
Panasonic Corp. Electronics Conglomerate
Phone In Mag-Electronics
Pioneer Material Precision Tech. Functional elastomers (rubbers / silicone )
Primax Electronics Computer, electronics and consumer products
Qorvo Inc. Radio-frequency systems
Quadrant Solutions Custom magnetic solutions
Qualcomm Inc. Wireless electronics solutions
Quanta Computer Inc. Notebook and computer manufacturer
R.R. Donelley & Sons Marketing and business communication and commercial printing
Radian Opto-Elecrtronics LCD backlight
Renesas Electronics Semiconductor manufacturer
Risuntek Inc. Eletronic products
Robert Bosch Precision mechanics and electrical engineering
Rohm Co. Ltd. Electronics parts manufacturer
SABIC Innovative Plastics Polymers, Chemical, Argi-nuteriants manufacturer
Salcomp Power adapters and chargers
Samsung Electronics Electronic components Conglomerate
Samsung SDI Storage battery
Seiko Advance Ltd. Screen ink
Seoul Semiconductor Ltd. LED
Shandong Innovation Grp. ??
Sharp Corp. electronic products, particullary displays
Shenzen Desay Battery Tech. Battery
Shenzen Fortuna Tech. thermoplastic polyuthane (TPU), silicon and plastic field products
Shenzen Sunway Communicatoin Co. Ltd. Mobile terminal antenna
Shenzen YUTO Packaging Tech Brand packaging solutions
Shin Zu Shing Hinge assembly, springs and stamping
Simplo Tech Lithum batteries
SK Hynix memory Semiconductor
Skyworks Solutions Inc. Semiconductor, radio and mobile communications
SMK Corp. Connectors, switches, plugs, etc
Solvay SA Chemical company
Sony Corp. Electronic Conglomerate
STMicroelectronics N.V. Electronics and Semiconductor manufacturing
Stora Enso Oyj Pulp, paper and forest products
Sumida Corp. Inductive components and modules
Sumitomo Chemical Ltd.
Sunrex Technology Co. Ltd. Computer peripheral products
Sunwodo Electric Co. Ltd. Electronic manufacutring services
Suzhou Dongshang Precision Ltd. Precision metal plate and cast metal
Suzhou Zhongjemai Panal Industry Tech Ltd. ??
Swiftronic Holding Rubber composite material, plastic mold and precision rubber
Taishan City Kam Kiu Aluminum Extrusion Aluminum materials
Taiwan Hokoda Tech Ltd. Aluminum billets and extrusion
Taiwan Semiconductor Manufacturing Ltd. Semiconductor contract manufacturing and design
Taiyo Yuden Co. Electronic parts and recordable media
TDK Corp. Electronic materials and recording / data storage media
Texas Instrument Inc. Semiconductor and integrated circuits
The Chemours Co. Chemical company
TK Group Vegetable oil Conglomerate. Also does ship building, pulp and paper, plastics, cement and textiles
Tongda Group Ltd. Electronic component manufacturing
Toshiba Corp. Conglomerate
Toyo Rikagaku Kenkyusho Metalworking technologies
TPK Holding Touch panels
Trinseo S.A. Plastics, latex binders and synthetic rubber materials
Tripod Tech. Co. Manufacture and distirbution of PCBs
Tsujiden Co. Ltd. Optical films for backlights and other films
TTM Technologies Ltd. PCB manufacturing
UACJ Corp. Aluminum extruded product manufacturing
Unimicron Tech. Corp. PCB manufacturing
Unisteel Tech. Corp. Precision engineering component
Unimicron Tech Corp. PCB manufacturer
Unitech Printed Circuit Board Corp PCB manufacturing
Western Digital Corp. Hard drive and data storage company
Wickeder Group
Winox Enterprise Co. Ltd. Watch braclet, custom jewelery and smartphone casing
Wistron Corp. Orignal Design manufacturer
Xiamen Jian Jia Optoelectronics Co. Ltd Optical film materials, brightness enhancement films, conductive devices and others
Yageo Corp. Passive devices - resistors, capacitors and inductors
Young Poong Corp. Non-ferrous metals
Zeniya Aluminum Engineering Ltd. Aluminum Products
Zhen Ding Tech. Ltd. PCB manufacturing
Zhenghe Group Petrochemical products

Other suppliers

Supplier Potential supply
AMD Inc. CPU / Graphics chips
Cirrus Logic Inc. Analog, mixed-signals and DSP circuits
Dialog Semiconductor Integraed, mixed-signal curcuits
Lumentum Holdings Inc. Optical and photonic products
Omnivision Inc. Image sensor manufacturing
Parade Tech. Inc. LCD panel timing controllers
Silicon Works Co. Ltd. Mixed-signals Semiconductor
SiTime Corp. Silicon based timing solutions
Synaptics Inc.


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