“As Apple CEO Tim Cook unveiled new iPhones yesterday, a complex operation had already kicked into gear behind the scenes to send millions of the handsets to store shelves worldwide,” Adam Satariano reports for Bloomberg.
“The process starts in China, where pallets of iPhones are moved from factories in unmarked containers accompanied by a security detail. The containers are then loaded onto trucks and shipped via pre-bought airfreight space, including on old Russian military transports,” Satariano reports. “The journey ends in stores where the world’s biggest technology company makes constant adjustments based on demand, said people who have worked on Apple’s logistics and asked not to be identified because the process is secret.”
Satariano reports, “The logistics for a new gadget start months before it is unveiled, said the people with knowledge of the process. Apple first coordinates flights and trucks to move components from suppliers to assembly plants in China. Teams from sales, marketing, operations and finance collaborate to forecast how many devices the company expects to sell, said the people.”
MacDailyNews Take: Apple’s worst estimation failure? iPad 2 in March 2011. Lines outside stores for weeks and it took forever for supply to catch up with demand.
Satariano reports, “The internal estimate is crucial. An example of how that can go wrong is Microsoft’s recent $900 million writedown because of unsold Surface tablets.”
MacDailyNews Take: That estimate, which made Apple’s iPad 2 estimate look accurate, was arrived at by Ballmer throwing darts at a BINGO card.
“Once a forecast is made, millions of iPhones are manufactured, said the people with knowledge of the process. The handsets remain in China while Apple’s software team at headquarters finishes work on the iOS software that runs on the device, said a former Apple manager who declined to be named because the process is private. Once a final version is finished, the software is loaded on the phones,” Satariano reports. “Before Apple’s formal unveiling on stage, iPhones are shipped to distribution centers around the world, including Australia, China, the Czech Republic, Japan, Singapore, the U.K. and the U.S., said one of the people with knowledge of the matter. Security personnel are with the devices every step of the way, from truck depots, airports, customs and storage warehouses until the product is finally unveiled, two people said.”
Much more scintillating info about logistics in the full article here.
MacDailyNews Take: Among the many problems with assembling in China is that China leaks like a sieve. We had everything but the Jony Ive video prior to yesterday’s “unveiling.”
Related articles:
Apple delivers mystery sealed pallets to Apple stores, warns do not open until directed – February 21, 2011
Apple rethinks inventory management for iPad 2 as lines outside stores persist – March 16, 2011
Photo: Apple Store Scottsdale Quarter takes delivery of pallet of iPhone 4 units under armed guard – June 24, 2010
Another reason to bring manufacturing back to the US. Not that it will happen, but wishful thinking…