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November 28th, 2010

by Ram Ganeshan

The iPhone 4 Supply Chain Buy Zithromax Without Prescription, Next time you check email or browse your Facebook page on your iPhone 4, think about this: a symphony of hundreds of parts designed by a multitude of companies from three continents has made it happen.

This post follows the iPhone 4’s supply chain – its part suppliers, fabrication, and assembly. I have included an interactive graphic you can explore and learn more about how your iPhone 4 comes together, Zithromax interactions. Enjoy.

How a phone is designed (See Note 1)

The design and production of a phone is a complex process. Apart from the senior executives who sign off on the final product, phone design is a compromise between the industrial design team, the engineers, and the supply chain team, Buy Zithromax Without Prescription. The industrial design team typically designs the “shell” of the phone – how it looks, Zithromax from canada, the materials used, and how it interacts with the customer. The engineers meanwhile design the “guts” of the phone – the hardware and the software. As you can imagine, there is a lot of back-and-forth between these teams (no points for guessing who wins these battles at Apple) to make certain that the mechanical and electro-mechanical parts in the “guts” work in harmony with the overall design of the phone, purchase Zithromax online no prescription. After the initial “virtual” design is complete, the engineering team generates a bill of materials. Buy Zithromax Without Prescription, This is where the supply chain team steps in. They evaluate the bill of materials, Buy cheap Zithromax no rx, cost out the product, and working with the designers, engineers, and many of the suppliers, provide input to develop the final design that has the best combination of features and manufacturability, Zithromax blogs.

Many of the design decisions of the iPhone 4 stem from competitive pressures. When Verizon and Motorola’s Driod took a stab at iPhone 3GS for an inferior display, a lower resolution camera, Herbal Zithromax, and an inability to run parallel apps, Apple had to respond. Other decisions, like the stainless steel band sandwiched between two panels of engineered glass is the product of the genius of Jonathan Ive, head of Apple’s industrial design team, buy Zithromax no prescription.

I only wish I could be a fly on the wall as these teams argue for their positions, Buy Zithromax Without Prescription. Given Apple and Steve Jobs’ design aesthetic, I suspect Jonathan Ive and his industrial design team weigh in heavily on the final product. For example, Zithromax overnight, the stainless steel housing in the Apple iPhone 4 is completely CNC machined and is much more expensive than any other manufacturing process. My guess is that the Apple supply chain team resisted the CNC machining process (probably recommended the casting process of the previous iPhone 3GS model), but got overruled because the precision-engineered case made the phone lighter and thinner and, yes, its stunning looks trumped any supply chain cost-containment concerns, after Zithromax. The supply chain team, however, scored a victory when it comes to sourcing components in the logic boards. Buy Zithromax Without Prescription, Most of the major suppliers for the chips are the same as the iPhone 3GS model, and most of the chips are  “off-the-shelf” making it easier and cheaper to procure them and to execute production. Comprar en línea Zithromax, comprar Zithromax baratos, In fact, Apple’s consistently reliable & profitable operations has made their supply chain team led by its COO Tom Cook one of the most envied in the industry -- they develop and source from hundreds of suppliers from around the world; manage assembly contractors; set challenging production schedules and deliver better than most in their industry.

The process from design to production typically takes about ten months. Taking the design to market takes up the bulk of this schedule. This includes sourcing the components, canada, mexico, india, testing the phone, getting the phone approved by the FCC, and finally, No prescription Zithromax online, piloting dry runs in the factory to make sure the phone can be mass-produced. For a typical Christmas delivery, the design & engineering teams start working in January, Buy Zithromax Without Prescription.

Big-ticket items

While Apple does not reveal the components in its products or its suppliers, companies like iSuppli of El Segundo, CA, publish “tear down” reports that reveal the source and the estimated cost of many of the components (see Note 2), is Zithromax addictive.

The biggest design change from the iPhone 3GS and the most expensive part of the iPhone 4 is the 326 pixels per inch backlit LCD display which Apple markets as the “Retina Display.” According to Apple, the 326 pixels-per-inch density is so high that the eye cannot distinguish the individual pixels (hence “retina”). It costs $28.50 and is made by LG of Korea. Zithromax dangers, Toshiba, supplier to the previous 3GS model could also be a supplier of the display. Buy Zithromax Without Prescription, It is unlikely that the design of the display will be changed for the next generation of the iPhone – the supply chain team has developed this supply base and large volume orders over multiple years would reduce the cost per display procured.

Apple’s Multi-touch technology lets you interact with the iPhone with your fingers. When you swipe, pinch, about Zithromax, or tap, a laminated panel on the iPhone’s surface reads these “gestures” and sends the signals to the Retina Display below it. The touch screen (costing $10) is made by three Taiwanese companies Balda/TPK (See Note 3), Where can i order Zithromax without prescription, Wintek, and Chimei Innolux (45%, 40%, and 15% of the volume respectively). Balda/TPK and Wintek were used before, buy Zithromax online no prescription. It is likely Apple is developing multiple sources to keep pace with the demand, Buy Zithromax Without Prescription.

The iPhone’s primary (5 MP with LED flash) and secondary (enabling the Face time application and one-upping the Droid) cameras (costing $10.75) are designed by Santa Clara, CA based OmiVision. The camera lens modules come from Taiwan’s Largan Precision and Genius Electonic. Zithromax photos, more text after the graphic...

Multimedia: The iPhone 4 Supply Chain

The following graphic is interactive –click on each of the components and the appropriate suppliers and costs will be highlighted. Buy Zithromax Without Prescription, Mouse over supplier locations on the map to learn more about each of the suppliers. Click the bar chart for competitor pricing. Enjoy. It’s a little slow – it is on another server, Zithromax use. For a larger version of the graphic, click here.

The Little Details – The Logic Board

The biggest change in the “guts” of the phone is the Apple designed A4 processor (costing $10.75) which helps run all the software, Buy Zithromax Without Prescription. It is capable of multi-tasking – you can listen to music as you browse the web at the same time. Effects of Zithromax, The chip along with the DRAM memory ($13), just like in the previous 3GS model, is made by Samsung of Korea. Samsung is a big winner in the iPhone 4 supply chain -- it also makes the flash memory ($27 for 16GB) on which your music, photos, buy cheap Zithromax, movies, and other data is stored.

When you turn the phone on the side, Zithromax cost, how do your photos, email, or web page turn with it. Buy Zithromax Without Prescription, How does the iPhone sense a shake, twist, or a jab when you play games (see Steve Jobs play Jenga)?  Apple engineers use an accelerometer coupled with a gyroscope (the gyro is new in iPhone 4) from STMicroelectronics based in Geneva to sense movement. Together, they cost $3.25, Zithromax schedule, not bad for such cool sensors, eh.

Infineon, Buy Zithromax from canada, based in Germany, provides the baseband – chips that help you make voice and data calls (for $14.05). American companies TriQuint, SkyWorks, Intel, Zithromax canada, mexico, india, and the Japanese manufacturer Murata all provide radio frequency modules (totaling $8.25) to help send and receive data. Broadcom, based in Irvine CA provides the GPS, Zithromax pics, WiFi, and Bluetooth capabilities of the iPhone ($9.55); and Cirrus Logic of Dallas, TX provides chips that encode and decode audio ($1.15).

The parts may be inexpensive but considering Apple sold 39 million phones in the last year, even small components add up to big numbers for these suppliers, Buy Zithromax Without Prescription. In all, iSuppli’s teardown estimates a total parts cost to be $187.51, is Zithromax safe.

Fab Taiwan

Low costs and backed by a robust national technology policy, Taiwan is a leading center for IC design, fabrication, Zithromax brand name, packaging, and testing. Some iPhone suppliers like Broadcom (the GPS/WiFi/Bluetooth chipset designer) are “fabless” i.e., they design but do not have the facilities to manufacture these chips. They rely on their foundry partner, buying Zithromax online over the counter, Taiwan Semiconductor Manufacturing Corporation (TSMC) to fabricate their chips. Buy Zithromax Without Prescription, Even those iPhone suppliers that have their own fabrication facilities like Texas Instruments, Dailog, Infenion, or Skyworks routinely contract chip manufacture to TSMC. Little wonder that TSMC is the largest chip foundry in the world. Even the parts required to assemble the logic board such as the “substrate” and “copper-clad laminates” (these are inputs to the familiar PCBs on which chips are placed) are sourced in Taiwan, Zithromax reviews, an island about twice the size of New Jersey.

They cannot make enough of it

All the parts for the iPhone eventually make their way to Foxconn’s (Apple’s assembly contractor) manufacturing complex in Shenzhen, China. While the major parts of the iPhone 4 -- chassis, glass panels, Zithromax no prescription, display, touch screen, and logic board fabrication are done by machines, Online Zithromax without a prescription, the final assembly is done by hand. Most likely workers are following a precise set of steps (put together by Apple’s design & engineering teams) to assemble the iPhones, Buy Zithromax Without Prescription. Foxconn, a subsidiary of Hon Hai Precision Industry of Taiwan, assembles about 137,000 iPhones a day, Zithromax gel, ointment, cream, pill, spray, continuous-release, extended-release. That’s about 12.3 million a quarter, not enough to keep up with Apple’s most recent quarterly sales (Q3 of 2010) of 14.1 million iPhones.

Foxconn was in the news all Summer of 2010 for the spate of worker suicides in its Shenzhen facility related to work stress. Buy no prescription Zithromax online, Workers complained of long work hours and abusive superiors for meager pay (see Gizmodo’s expose with pictures). Buy Zithromax Without Prescription, Since then, Foxconn has responded with program’s to improve worker morale and a 30% increase in pay. Even with the 30% increase, with the average worker makes $176 a month.

Once the phones are put together, the iPhone is distributed via Apple’s own retail network, Zithromax from canadian pharmacy, wholesalers, resellers, and carriers in 89 countries in partnership with 166 carriers. Zithromax alternatives, …and one more thing

Here is a back-of-the-napkin calculation  (see Note 4) of the profits Apple makes on each iPhone:

Revenue per iPhone $629.65
Materials $187.51
Assembly Operations $6.54
Research & Development $17.00
Selling, General, & Administrative $53.52
Misc Costs (Distribution, Licensing, Warranties, Zithromax street price, etc.) $94.45
Profit before taxes $270.63

Apple sold 39.98 million phones last year. If $270.63 is in the ballpark, then Apple made $10.82 billion profit on the iPhone, Zithromax forum, 60% of the overall pre-tax profits of $18.38 billion. This is phenomenal considering the iPhone did not exist four years ago, Buy Zithromax Without Prescription.

Steve Jobs was quoted describing the Mac OS X's Aqua user interface: "We made the buttons on the screen look so good you'll want to lick them." It’s better than that. It seems Apple has no trouble having us pay $600 for an iPhone. It’s quality materials, precision manufacturing, buy Zithromax from mexico, and oh, if it adds to your steez, why not. Purchase Zithromax, Contact Ram Ganeshan at ram.ganeshan[at]mason.wm.edu or @RamGaneshan on Twitter

1. Buy Zithromax Without Prescription, The content for this section is based on my many interviews with industry insiders.

2. The information on components and their costs come from iSuppli’s teardown reports for the iPhone 4, Blackberry Torch, Motorola Droid, and Nokia N8.

While it is impossible to determine exact manufacturing locations for all the components from public sources, published reports and press briefings (unconfirmed by Apple) identify suppliers in many instances. For example, Taiwan’s Digitimes reports here on details of iPhone 4’s Taiwanese suppliers.

3, Buy Zithromax Without Prescription. Balda is a German company that holds a major stake in TPK. TPK is listed on the Taiwan Stock Exchange (Stock Code 3673) but has manufacturing facilities in Xiamen, China. In all likelihood, the touch screens are made in the Xiamen facilities.

4. For the year Buy Zithromax Without Prescription, ending September 25, 2010, Apple sold 39.98 million iPhones and made $25.179 billion on them – that is $629.65 per phone sold. The cost of parts and assembly are from iSuppli’s estimates from teardown reports. Apple spent 2.7% of Sales on Research and Development and 8.5% on Selling, General, and Administrative Costs. So for every iPhone it averages out to $17 and $53.52 for R & D and SG & A respectively. From my own experience working with firms, I estimate the cost of logistics and distribution, returns management, and warranties, i.e., moving the components to China, phones from China to the stores (“shipping and handling”), paying for inventory, obsolescence, pilferage, fixing phones (given iPhone 4’s antennagate), etc., at about 10-20% of sales. I use 15% to get the $94.95 estimate, although I suspect it is a little bit more than that.

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Tag Archives: Supply Chain

Buy Imitrex Without Prescription

January 28th, 2010

by Ram Ganeshan

Buy Imitrex Without Prescription, In this edition of the Thought Leadership Project, I talk to K. Dane Brooksher who recently retired as the CEO and Chairman of Prologis. ProLogis is a leading global provider of distribution facilities, effects of Imitrex, with more than 475 million square feet of industrial space in markets all across North America, Imitrex long term, Europe and Asia.

He talks about leadership, challenges of growing and going global, fast shipping Imitrex, operations and sustainability. Purchase Imitrex online, About K. Dane Brooksher

K, Buy Imitrex Without Prescription. Dane Brooksher is Retired Chairman and CEO of ProLogis, a leading provider of distribution services and facilities, Imitrex canada, mexico, india. Mr. Get Imitrex, Brooksher began his career with ProLogis in 1993 and during that time held the positions of Chairman of the Board, Chief Operating Officer (COO), Co- Chairman and CEO, buy Imitrex without a prescription. Prior to joining ProLogis, Imitrex australia, uk, us, usa, he spent over 32 years with KPMG LLP, serving as the managing partner for the Mid-West area and the Chicago office, as well as serving on the firm's Board of Directors, Imitrex from canada, Management Committee and as International Development Partner. Buy Imitrex Without Prescription, Mr. Imitrex cost, Brooksher is currently a director of Qwest Communications International, Inc., a publicly traded telecommunications firm and Pactiv Corporation, Imitrex pics, a publicly traded consumer goods and food products packaging firm. Imitrex from canadian pharmacy,

The conversation

This is a condensed version of Prof. Ram Ganeshan’s (RG) interview with K. Dane Brooksher (DB), order Imitrex no prescription.

RG: Tell us about your leadership style, Buy Imitrex Without Prescription. What was your leadership style and how did it evolve in the course of your tenure at ProLogis?

DB: When I went to ProLogis, Imitrex price, it was a start up. In the early years by and large I did everything. I was the CEO, Imitrex price, coupon, the chief financial officer and the human resource person. Imitrex forum, I even did all the hiring and firing.

Buy Imitrex Without Prescription, As we grew larger, my leadership style evolved over the years into one of what I call team leadership, and to being the leader of the team. You are the quarterback of the team. And recognizing that we had great people with great ideas, australia, uk, us, usa, all we needed to do was pull them together. Imitrex no rx, We got everybody on the same page once we decided which direction we wanted to take and the play we wanted to call.

RG: What were the challenges, as you grew bigger?

DB: Initially the idea was to start a real estate company whose focus was not on the real estate but on the customer, rx free Imitrex, the tenant. Our goal was to build a company that was based upon relationships with customers on a long-term basis as opposed to the normal transaction-based real estate mindset, Buy Imitrex Without Prescription. Order Imitrex online c.o.d, It’s not unlike a professional service firm where you have a client and you do something for that client all the time. That was the real challenge, to hire real estate people and then convert them to this culture, discount Imitrex. This probably was the biggest challenge of putting the company together because if you weren’t able to do this you weren’t able to achieve the vision that you had for the company. About Imitrex, RG: How did you solve the customer side of the riddle. Why were they willing to sign up with a small start up at least in the early years?

DB: Buy Imitrex Without Prescription, If a customer -- even large ones like Home Depot or General Electric, or Ford -- wanted one distribution center in Reno, Nevada and another in Chicago, the only option they had was to send their people to Reno and find out who the developers were to execute or lease them or build them the base that they wanted. Then they had to go to Chicago and do it all over again. So ProLogis was put together to solve that problem as well for the customer, purchase Imitrex for sale.

RG: And you were able to do it a lot cheaper and a lot more efficiently than they could do it themselves.

DB: Right. No prescription Imitrex online, We also had to convince the customer that this model would work for them and that it would be cost effective because they could call us up and say we want a distribution center in Reno, one in Chicago and negotiate the whole thing with us for both of them.

RG: How do you manage supply, Buy Imitrex Without Prescription. I am assuming in this case it is land you have acquired?

DB: At the same time that you’re assessing your customer’s needs, real brand Imitrex online, you have already acquired land and entitled that land and you will also probably take part of it and go ahead and put up a distribution center that is not leased in anticipation of the growing needs of your customer base in the local market. Buy Imitrex from canada, RG: it’s almost like holding inventory. “Shovel-ready” Distribution Centers?

DB: That’s exactly right. In fact that’s what we called it -- inventory development rather than spec development, Imitrex trusted pharmacy reviews. Buy Imitrex Without Prescription, We tried to change all the language that real estate people were using. They would refer to that as spec building and we referred to it as inventory. Purchase Imitrex, RG: And how ahead of the customer demand were you, I mean were you ever caught in a…

DB: Oh yes, that’s part of the risk of the business but if you limited your inventory – and that’s an art, buy cheap Imitrex no rx, not a science – depending on the market and the economy at the time and the number of inquiries. Where to buy Imitrex, You had a lot of measurements that you monitored.

RG: About five or six years ago you also diversified into providing some consulting services for your customers.

DB: Part of what we wanted to do was also be known as the go-to company to assist your customers in analyzing the most efficient and cost effective way to put together or change distribution systems based on the changes in their products and regulations, laws, Imitrex treatment, the whole gambit of the things you teach in your supply chain class.

RG: What sorts of trends were you noticing on a macro level, are firms using less distribution centers or more or were they trying to move products faster?

DB: I would answer by first saying thing that it’s always changing, Buy Imitrex Without Prescription. Online buying Imitrex, And one shoe does not fit all. So we’d have a customer say in health care that was providing hospitals and medical centers with various supplies. They needed to be very close to their customer so they would probably put together a distribution center that was small but was very close to their customer base in that particular area, buy generic Imitrex.

RG: So a quick response was their goal.

DB: As opposed to say again, Imitrex images, Home Depot, their distribution centers were going to have a lot of products and big products as well as small products - refrigerators, lumber, Imitrex description, whatever it might be. Buy Imitrex Without Prescription, So they needed a lot bigger distribution center but the products weren’t critical to be there the next day necessarily so they would opt for a hub and spoke system. Online buy Imitrex without a prescription, So they’d have five hundred thousand to a million foot square distribution center that may serve a lot of stores.

RG: What prompted you to go global. What were the challenges?

DB: That was again customer driven, generic Imitrex. Customers would say  “Hey you’re doing a good job for us in the United States and we’re having all kinds of trouble in Mexico, Herbal Imitrex, and any chance you’d be interested in going down there and starting this out for us?” And that’s how it started.

We went to Mexico, we went to Europe, went to Asia and we just simply used a philosophy of following the customer, Buy Imitrex Without Prescription.

Every country’s got their own laws and they’ve got their own way of looking at real estate development regardless of what the deal is. So you had to understand all that and to understand all that you couldn’t be sending an expat over to do it, Imitrex no prescription. You had to hire local people and that was how we built the business. Imitrex coupon, RG: Environmental stewardship and sustainability is now a huge part of the company. What are your general opinions on that and what should businesses be doing?

DB: Buy Imitrex Without Prescription, I think you should do everything to minimize the impact on the environment with your business. Environmental stewardship by reducing our carbon footprint and reducing dependence on fossil fuels is one aspect. Corporate social responsibility  --demanding high standards of societal conduct by everybody involved is another aspect.

We, as a company and as individuals, must continue to minimize our impact on this planet for the benefit of the people that have not yet inhabited this planet.

So we do it for sustainability, social responsibility, but generally speaking, also for our customers. Our major customers are concerned about the same things and they’re always looking to do business with who share the same values.

About Prologis

ProLogis is a leading global provider of distribution facilities, with more than 475 million square feet (44 million square meters) of industrial space in markets all across North America, Europe and Asia.

ProLogis leases industrial space to manufacturers, retailers, transportation companies, third-party logistics providers and other enterprises with large-scale distribution needs. Headquartered in Denver, Colorado USA, ProLogis is a FORTUNE 500 company and a member of the S&P 500. .

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