According to The New York Times, not the cost of labor, not the cost of components, but rather the speed and flexibility with which Chinese factories can respond to iPhone and iPad manufacturing demands is reportedly the reason Apple prefers them over their U.S. counterparts.
One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.
A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.
This isn't unique to Apple, of course, but Apple's popularity and profile, fueled by their exceptional supply-chain management, gets their name in the headline.
For a complete run down of the realities of modern manufacturing, and examples including Steve Jobs' response to U.S. President Obama, give the full article a read.
Source: New York Times
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