The Man Who Makes Your iPhone

http://www.businessweek.com/magazine/content/10_38/b4195058423479.htm?campaign_id=rss_topStories

by nreece • 16 years ago

99 35 16 years ago

shadytrees• 16 years ago

The link 404'd for me, but it works without the campaign_id: http://www.businessweek.com/magazine/content/10_38/b41950584...

chaosmachine• 16 years ago

"When Apple's iPhone4 was nearing production, Foxconn and Apple discovered that the metal frame was so specialized that it could be made only by an expensive, low-volume machine usually reserved for prototypes. Apple's designers wouldn't budge on their specs, so Gou ordered more than 1,000 of the $20,000 machines from Tokyo-based Fanuc. Most companies have just one."

eitally3• 16 years ago

So?

eitally3• 16 years ago

I knew this was coming when I didn't elaborate on my response, but I don't really see what the parent was trying to get at. Apple uses Foxconn/Hon Hai because they are the biggest and the best at mass manufacturing consumer electronics. Foxconn is the only EMS company with the scale to depress supply chain costs to a point where they can actually make money on tiny margin products (like cell phones, mp3 players, and even PCs[1]). I am 100% sure the tooling debate arose during the planning phase, and I'm also 100% sure that it's in both Foxconn's and Apple's best interest for Apple not to have to go elsewhere. At the end of the day, a machinery investment like this isn't just going to support the iPhone contract (though it will be used by Foxconn in future negotiations, I'm sure), but other similar business they win. Here's another tidbit: Foxconn doesn't use Fuji pick & place machines. Anecdotally I've heard it's because Fuji is a Japanese company, and since there's a viable non-Japanese alternative -- Siemens[2] -- there's no need to use Fuji. However, what Foxconn did was negotiate an exclusive contract with Siemens so that they'd have the exclusive manufacturing contract for Siemens Siplace line and in return they'd commit to only using the Siemens equipment themselves. At their scale -- thousands of SMT lines, with each machine costing in the $250k range, this saves many millions each year.

I work in this industry and am happy to answer any questions about electronics manufacturing.

[1] Taiwanese companies like Quanta and Compal are excelling at laptop design and manufacturing, and in some cases Acer and Asus still build their own products, but almost all of it is outsourced to Quanta & Compal. [2] http://ea.automation.siemens.com/11116/Products/Placement-Sy...

karzeem• 16 years ago

I wonder if Foxconn charged Apple commensurately more.

patio112• 16 years ago

You can count to twenty million very, very quickly in manufacturing. There are individual buttons in and near Nagoya that cost more if you press them once.

mechanical_fish2• 16 years ago

I believe it was Intel that used to joke about the "million-dollar club". The story I heard is that, as a fab engineer, you got admitted to the club by accidentally spoiling one lot of wafers, each of which represented more than one million dollars in gross revenue.

Since there are many, many potential process mistakes that can spoil an entire lot at once, the implication was that you weren't going to remain outside the club for very long.

ZeroGravitas• 16 years ago

Anyone else find it odd that they didn't see this coming?

It's either scarily bad planning on Apple's part (let's not rule it out given their white iPhone 4 woes), or scarily bad journalism trying to turn "buying new machinery to manufacture a new part" into something exciting.

Even if you count only the first month of US sales that's only $7 per iPhone.

hswolff• 16 years ago

One page: http://www.businessweek.com/print/magazine/content/10_38/b41...

elai2• 16 years ago

So %0.0012 (11/920'000) of their workforce has committed suicide? What is the average percentage of suicide deaths in that age range in china?

aaronbrethorst• 16 years ago

Significantly higher than that, from what I understand. It's actually one of those unfortunately 'uninteresting' headlines that will just never make headlines: "Foxconn suicides significantly below national averages."

Remember: newspapers and blogs are in the selling eyeballs business, not in the reporting news business.

nostromo• 16 years ago

Well, to be fair, these people commited suicide at work and sometimes left notes pointing to their failures at work while working 7 days a week for 15 hours a day. I don't personally think this story is just media hype. http://news.xinhuanet.com/english2010/china/2010-05/25/c_133... http://blogs.telegraph.co.uk/news/malcolmmoore/100039883/wha...

From the linked Telegraph article, "For those who believe the spate of suicides is statistically in line, given how many people work at Foxconn, consider this: the company says it has prevented a further 30 people from trying to kill themselves in the past three weeks alone."

ugh2• 16 years ago

Those who committed suicide were between 18 and 29 years old. The suicide rate in mainland China for 15 to 24 year olds is 0.007 percent, the suicide rate for 25 to 34 year olds is 0.015 percent (WHO, 1999, http://www.who.int/mental_health/media/chin.pdf).

I wouldn’t be so fast with comparisons, though. You might have to double your percentage (the suicides happened between January and May 2010). I also don’t know whether suicides of Foxconn workers not on company estates are included. That might skew the numbers substantially.

dsspence• 16 years ago

The United States Army has a suicide rate of 20.2/100,000.

http://www.wsws.org/articles/2010/jan2010/suic-j06.shtml

yread• 16 years ago

Of course! These people are in a war! They get slaughtered, they slaughter, they can get woken up anytime by a crazy ally shooting everybody! They can't trust even most common items as they can be stuffed with explosives. They can't trust the locals because they might be after them.

Would you like your workplace to be like that? I mean, I hope that there is no workplace as stressful as a war.

duck• 16 years ago

stringing more than 3 million square meters of yellow-mesh netting around its buildings to catch jumpers

Out of all the ways to reduce the suicide rate, I don't think this would of made my list.

megablast• 16 years ago

To be fair, this is no the only thing they did, and it is a lot more visual than the other methods they tried. Visual can be good.

They had to do the same thing at a mall near where I live, they strung up safety nets to stop people jumping the 7 stories to their deaths. Of course, there weren't workers at the mall, but it is just something you can do, on top of the usual.

eduardoflores• 16 years ago

From World Health Organization, 1999 for "selected rural & urban areas", the suicide rate is 13.0 (male) 14.8 (female) suicide per 100,000. Wolfram Alpha shows 20.9 suicide per 100,000 persons per year. Both looks pretti high compared to other countries. http://www.who.int/mental_health/prevention/suicide/suicider... http://www.wolframalpha.com/input/?i=china+suicide+rate

jjcm• 16 years ago

"Foxconn founder Terry Gou might be regarded as Henry Ford reincarnated if only a dozen of his workers hadn't killed themselves this year"

Ouch, that's a cold way to start an article - odd considering they go into detail his charitable works later on in the article.

eitally3• 16 years ago

If you knew him, or knew people who have had personal relationships with him, you'd understand why this is a reasonable lead-in.

emit_time_n3rgy• 16 years ago

As far as nearly comparing him to Henry Ford..in the book "New World Coming" it is mentioned that Henry Ford came up with the term "Messiah Machine" which I find unsettling when I associate it with industrialization, factory work, and this story.

Das_Bruce2• 16 years ago

What is a 'postmodern industrial empire'?

I'm not sure it makes any sense, like the gradient of a cow.

ugh2• 16 years ago

If you take ‘postmodern’ as denoting merely time (say, post-1980s) it does make sense.

metageek2• 16 years ago

...yeah, but that's not what it means.

Although I suppose letting words mean whatever you want them to mean is fairly postmodern.

metageek2• 16 years ago

Hmm. Postmodernism denies the existence of objective truth, right? Sounds perfect for PR and marketing.

Customer: "My laptop caught fire. My legs are scarred for life. Don't you guys do any QA?"

Marketeer: "Tsk. You're such an absolutist. Our preferred viewpoint is that you engaged in a thermal interaction with your ZX-Q17/6, did irreparable damage to its electrometabolic essence, and caused your legs to transform to a uniquely valuable configuration."

Customer: "...now my legs are scarred for life, and my head hurts."

mechanical_fish2• 16 years ago

It's like this guy has been stalking me my entire life:

... he bought a couple of plastic molding machines and started making channel-changing knobs for black-and-white televisions. His first customer was Chicago-based Admiral TV, and he soon got deals to supply RCA, Zenith, and Philips (PHG).

My family owned an RCA black-and-white TV in the seventies. This guy made the knobs for my childhood TV.

Gou's first break came in 1980 when he started supplying Atari with connectors that linked the joystick cable to its 2600 video-game console.

I remember that connector very well. What 2600 owner could forget them?

And the story just goes on like that, I'm sure. My iPhone is the spiritual descendent of those old things.

elai2• 16 years ago

Was the connector memorable in a good or bad way?

timruffles2• 16 years ago

Fascinating. Since it seems from the article that smaller companies are less worker friendly, and people are literally desperate to work for Foxconn, it's hard not to see Gou as a good thing for China & the Chinese.

A business epic...

theycallmemorty• 16 years ago

> The two were married on July 26, 2008, at the Grand Hyatt hotel in Taipei. During the reception, Gou mounted the stage, shed his tuxedo jacket, and did 30 pushups to prove his virility. Nine months and four days later, Delia gave birth to a daughter, Hsiao-ru.

That gave me a chuckle.

maukdaddy• 16 years ago

For all the shit that MBAs get, one thing you will never hear is "hungry people have especially clear minds"

That is absolutely awful.

The Man Who Makes Your iPhone

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