“Listening to the analysts on the business channels, you’d think Apple’s future is based on things like iPhone maps functionality or the success of the iPad mini. They’re wrong,” T. Lee Wylie writes for InformationWeek. “Apple, as well as most companies producing consumer-oriented products in China, have a much larger problem looming: Will they be able to produce their products to meet market demand?”
“Boston Consulting Group released a paper last year titled, ‘Made in America, Again,’ in which it made the case that China will lose its low-cost manufacturing position by 2015. BCG’s analysis shows a 15% to 20% annual increase in labor costs in China, as well as continued appreciation of the yuan, further eroding the country’s cost advantage. Trans-ocean freight costs will continue to rise. China’s economic advantage is quickly evaporating,” Wylie writes. “When the crisis becomes obvious, manufacturers will scramble to find a new home to produce their products. Most will simply search for the next location with low labor costs and nonexistent environmental and labor laws. Apple will choose a different route.”
Wylie writes, “This is where Tim Cook comes into the picture. Cook’s skill set is unique among CEOs of high-tech consumer product manufacturing companies. A master of logistics, he’s credited with reengineering Apple’s supply chain to increase profit margins while allowing for more flexibility to produce new products and make changes on the fly. His educational background in industrial engineering, coupled with an MBA, provides him with a toolbox the average CEO doesn’t have… The pundits and experts wanted the next CEO of Apple to be just like Steve Jobs, who was always ahead of the pundits and experts. Perhaps Jobs looked into the future and saw the challenges and opportunities that Apple faces. Keenly aware that Apple had grown into a large and complex company, Jobs knew better than anyone what skills the next CEO would require. And he groomed Tim Cook for the job.”
Read the full article – highly recommended – here.
MacDailyNews Take: BINGO!
Exactly. Even though the press knows much more about running the worlds most valuable company than the execs who got it there. Right?
Well, naturally I just assumed that Apple’s leadership mines the collective wisdom and piercing business acumen of reporters, bloggers, and rabid fans, in order to understand what they should be doing, before making any decisions.
Wait—why then don’t the reporters, bloggers, and rabid fans employ their profound knowledge directly, by working in design, manufacturing, and marketing, instead of wasting their valuable time bloviating? Hm. I must be missing something.
I like that bloviating thingy, I like it a lot.
Agreed. Steve didn’t just pick anyone to run his baby for the next generation. He certainly had vision on that as well.
I kind of remember this Wylie (coyote) guy doing shameless hit pieces on Apple in the past. What gives? Should I start to read what he says now!
That’s one of the most thoughtful statements about Steve Jobs and Tim Cook that I have ever read.
Yes. I’m a Cook too on my Mom’s side plus an Apple stock holder so I’m feeling pretty good about now.
I think that Apple’s solution to unreliable and increasingly expensive labour costs will be to invest very heavily in robotic assembly. Assembly then wouldn’t be so dependent on a huge supply of cheap workers.
Jony Ive is every bit as much interested in how iDevices are made as how they look and he would be able to rise to this particular challenge.
Apple is one of the few companies with sufficient cash to heavily invest in this sort of technology. They could end up in a situation similar to the way that they had tied up world’s supply of automatic machining equipment, meaning that rivals were unable to copy Apple’s solid aluminium unibody housings.
Tim Cook is a good cook.
he digs apple well.
give him a break, a chance.
iSteve did groom him after all.
ironic how fast people give up on apple.
they have achieved the impossible.
at least no other co. in human history has gone from bankruptcy or $1B to $$600B and in only a decade!
this is phoenix rising – try that!
plus apple is recession-proof & defies gravity.
apple is the only firm that truly gets, touches, inspires its consumers and respect their hard-earned money.
funny how so many give up on apple, see it crumbling over one button they think is wrongly designed, or complain of the size or point of iPad mini
…apple is too big,
for at least the next decade.
tim cook reinvented manufacturing, efficiency, distribution etc.
how can he fail?
no one comes close to apple’s nazi-like perfect efficiency.
that does not fail.
the press is full of shit.
they see iPad mini as failure when they are the ones who bitches since 2010-03 with 1st iPad that apple should do a 7″. now apple did yet they find it problematic?! neurotic or bipolar! there’s plenty of reasons why mini is practical. that’s a different discussion.
the press is full of shit about apple no longer being innovative since Cook reigns or after Steve.
> is the FusionDrive not innovative, radical?!
> is a 5mm thin PC, the new iMac, overshadowed by iPad mini, but real, not a tech marvel?!
> Lightning connector is so small, so digital, but not innovative?! naysayers only see that peripherals will not longer fit, but is that reason enough to stunt evolution?! no wonder they’re so angry but dumb
>iPad mini is an upgrade, not revolutionary, but still evolutionary. meanwhile what’s new in competition? cheap flimsy plastics with a few colored lights for gadgetry – who cares if it’s $100 cheaper in Kinde/Nexus/Nook, if it ain’t got the looks or feel or quality or ease or speed or flex or muscle or stability and smoothest user experience + top customer care?!
if tim cook cooked in my co. i wouldn’t complain. be it food or efficiency! if you still complain he’s boring, well, at least apples is progressing despite its size, profiting, giving, pleasing…more than anyone else, no matter how loud they bitch.
Nicely, almost poetically, said! Thanks, rolf!
The technical word for this skill is
TY for taking the time, making the case and for presenting it very well
Many considered my Uncle Harry boring, but he left his oil co. stock to my sister and me in his will.
We will never complain.
More correction question has to be what pundits and analysts do not miss?
“T. Lee Wylie is a former CIO of Gartner and the creator of the ERP concept. He has 25 years of experience in manufacturing and IT.”
This is the reason why this columnist understood the importance of Tim Cook’s expertise. Either that or he secretly reads your takes.
T. Lee Wylie suggested that Apple’s solution would be to make better use of silicon custom chips to simplify products and make them easier to assemble.
Maybe he missed the story about the iPhone 5 being the most difficult product that Foxconn has so far tried to build ?
Bingo?? I thought we were supposed to fire Tim Cook because he hired John Browett .
Learn how to read.
I read it here. You should learn how to remember.
Kent, I was thinking the same thing. A month or two ago MDN was using every possible opportunity to say something absurdly snarky about Tim Cook. The MDN “takes” on Apple’s CEO were ridiculously juvenile. But suddenly, in the last few weeks, Cook is the right guy for the job. I wonder what happened at MDN to cause the 180 degree change in perspective…
I love MDN and get some great Apple info and insight from the MDN take on most issues. But sometimes I get the feeling the normal editor is kidnapped, and put in the closet, and Joe Biden is given free reign with their MDN Take word processor. Maybe the use of the Biden intellect is a bit too strong of a criticism, but you get the idea.
I like Tim Cook a lot. He almost looked like Steve Jobs at the last iPad Mini keynote. I think he and the other execs are doing a stellar job. But I do miss Steve. He had an uncanny gift of technical knowledge and awareness of the marketplace. He will be missed.
I’ve said this MANY times, whenever there was yet another article about why Tim Cook is NOT Steve Jobs and therefore should not be Apple’s CEO.
Of course he’s not the next Steve Jobs. There is NO ONE that is like Steve Jobs. But the assumption of some of these so-called industry “experts” is that the next Apple CEO should be “the next Steve Jobs,” or Apple would fail.
NO. Apple’s CEO today needs to be someone who can effectively maneuver the world’s most profitable and valuable public company. Ideally, Steve Jobs would still be alive with Tim Cook as his operations guru. Fortunately, Steve Jobs instilled his creative genius into Apple itself, by hiring and mentoring the right creative people. Tim Cook is the right CEO at the right time, as Apple takes its next steps in its evolution as a tech giant.
These writers—they reuse the same tropes over and over again, because they’re hacks.
Especially “the Next _____”.
That one lazily presumes that all events proceed linearly, that history is just a row of benchmarks, that people have feature sets just like machines and can be plugged into operational positions with predictable results.
To them, there can be no surprises, nothing new under the sun, no uniqueness, no wonder or magic.
They will not be made in America ever again. For one, the raw metal supply used in electronics is export resricted by China. All the supporting industries are in China. If any production does come back to the USA it won’t need a large work force as it will be mostly automated. Generally you also want to produce product in or close to your highest volume market. That might be the USA today but who knows what that will be tomorrow.
Having to explain this is a VERY BAD sign. AAPL may never see a new high.
“Jobs knew better than anyone what skills the next CEO would require. And he groomed Tim Cook for the job.”
You would think that a good looking gay guy, like Tim Cook, could groom himself. He certainly is old enough.
“…provides him with a toolbox the average CEO doesn’t have…”
In contrast to Steve Ballmer who is just a toolbox.
rather, a tool in a box