Chinese firms should emulate Apple’s global manufacturing strategy for true success

By Wang Jiamei Source:Global Times Published: 2017/9/11 21:28:40

Techno-geeks around the world are waiting with bated breath for the release of the most expensive iPhone that Apple has ever made, an event that was scheduled for Tuesday (US time) at its new headquarters in Cupertino, California. The financial markets, meanwhile, are waiting to see whether the new iPhone 8 will boost Apple's market capitalization, which was about $830 billion at the end of last week.

What's behind the iPhone 8 craze? Apple's dominant influence in the global electronics market, which was built on its strong capability of managing globally integrated production.

As the competition in the global smartphone market gets more fierce, most producers are trying to win sales by cutting prices, but Apple is pursuing another strategy by introducing the costliest iPhone yet. It's a test of the US technology giant's customer loyalty and enthusiasm as its new product relies heavily on costly components supplied by its South Korean suppliers such as Samsung.

According to media reports, Samsung is the only supplier of OLED displays for the iPhone 8, and the company also provides part of the NAND flash memory chips.

LG Innotek is supplying facial recognition camera modules for the iPhone 8. South Korean suppliers also make printed circuit boards for the new iPhone.

Besides the South Korean suppliers, Apple has more than 700 suppliers all over the world, with 346 from the Chinese mainland.

Its ability to make the world's best products using global resources is what keeps its products unique and innovative all the time.

That's something missing in almost all the Chinese companies, which generally set their sights on making China's best products with local resources. While many Chinese companies have made investments in overseas factories in recent years, most of them still lag behind US companies in terms of global integrated production. Without the ability to integrate global resources, Chinese companies will never be able to produce something as successful and profitable as Apple's iPhones.

Only a few multinationals can achieve such a high level of globalization in the sense of completely integrated production, which is no easy task for Chinese companies at the current stage. But to gain a firm foothold in the world market, that's what Chinese companies must do to offer truly high value-added and innovative products.

The author is a reporter with the Global Times.


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