How Apple cuts costs in building its gadgets

With electronics companies widely acknowledging the ‘affordability’ as well as ‘versatility’ advantages of Asian manufacturing plants, Apple has set somewhat of a standard in the tech industry in terms of finding parts, and manufacturing its devices, almost entirely overseas.

Since the Apple devices – including the iPhone, iPod, iPad, and Mac laptops – come with an inscription, on the back side, says “Designed by Apple in California. Assembled in China,” it is evident that Apple is able to bring down the costs of building its devices by banking heavily on overseas manufacturers.

It is from more than 150 companies – the most prominent one being the China unit of Foxconn, owned by Hon Hai Precision Industry - from around the world that Apple gets the parts for its popular devices. To put it differently, a large chunk of the antennas, metal, glass, sensors and silicon used in the Apple devices are manufactured abroad.

Even though Apple has itself admitted in its supplier report that as many as 156 companies account for 97 percent of the money spent on materials, manufacturing and assembling of the famous Apple gadgets, Geoffrey Crothall - of the non-governmental agency China Labor Bulletin – has told CNN that workers at the overseas factories of companies like Apple feel that “they are not getting a fair share.”

Pointing out that there is a notable disparity between Apple's profits and Foxconn's compensation, Crothall said: “Just because Apple is making a profit doesn't mean they are passing that onto Foxconn; the margins are slim.”