Apple does not manufacture the iPhone. For that, as it does with most products that carry the Apple logo, our favorite Cupertino company turns to the Chinese. That’s right. Most iPhones are made in China, but Designed in California. Increasingly, Chinese manufacturers are turning to automation to reduce costs and improve quality. And, yes, Apple goes along with that.
Automation isn’t the future. It’s here already and it’s devastating the manufacturing industry. Or, at least those once employed by the manufacturing industry.
Nearly any food product or canned goods that you buy at the grocery store comes with sodium. No one product has enough sodium to cause health problems for average people. Collectively, though, sodium can become a health problem because too many products have– collectively– too much sodium.
Likewise, automation is spreading rapidly, reducing employment for humans as manufacturers make dramatic changes to how products are built– with fewer humans. It doesn’t take long for factories to have far fewer employees making more products at higher quality than more humans did just a few years early.
See the problem?
Apple is at the forefront of these automation efforts. Well, Apple’s manufacturers are at the forefront, but often with Apple’s engineering assistance or at least financial assistance. After all, what manufacturer doesn’t want to reduce manufacturing costs while increasing product quality?
Automation, like sodium increases in the diet, could reach a point of no return; a point in the future when too many of Apple’s customers are out of work and cannot afford to purchase a new iPhone or Mac or whatever else Apple makes because their jobs were lost to the very automated processes that helped Apple reduce costs and increase quality.
A report published by the Institute for Spatial Economic Analysis gives an indication of this happening already, and locations which will have the most damage first.
Job automation will hit certain metropolitan areas significantly harder than others. Low-wage cities like Las Vegas, NV, Orlando, FL, and Riverside-San Bernardino, CA are expected to be among the hardest-hit metros in terms of total job losses.
The impact of automation on jobs is likely to be more severe than previously anticipated. Based on recent advances in machine learning and mobile robotics, even non-routine jobs like truck driving, healthcare diagnostics, or even education can be affected.
The study determined that low wage jobs would be the most impacted by automation but this is not a recent occurrence. ATM’s in front of a bank give customers access to their accounts 24/7 and without the need for a bank teller.
There are lies, damned lies, and statistics in every analysis of automation’s impact, but, like sodium in the diet, the impact over time will be less visible until it cannot be ignored and possibly not even repairable as a social issue.
Apple is visible as the tip of the iceberg. The iPhone maker relies on less expensive Chinese labor to manufacture high quality products. But those very companies Apple requires are undergoing a transformation to automated manufacturing which will put their employees out of work, therefore, unable to afford to buy the very products they once helped to make.
Is there a solution? Is anyone at Apple paying attention to the problem and how it may impact the company’s products– revenue and profits– in the years to come?
Two thoughts come to mind.
Apple needs a plan to ensure that future products have a customer base who can afford to buy what Apple contracts with others to make.