Apple: OEM Again?

We tend to think of Apple the company as a design innovator and a great marketer. What we don’t think of Apple as is a manufacturer.

We should.

Per its 10-K, Apple ran up a tab of some $4.6 billion in capital expenditures in 2011, of which no less than $4 billion was for manufacturing and tooling. Keep in mind that this is a company that has no manufacturing facilities.

Apple went from a traditional OEM to a design/marketing company to one that owns everything from chip design to effectively owning the plants that build its products. It’s an OEM again.

So sure, Apple and Foxconn are tied at the hip. But the 10-K gives us a better glimpse as to why: Apple owns the lines. It’s one thing to move a program. It’s another to replace a factory, especially one with a hundred thousand workers.

Apple is the most valuable company in the world. It dominates its supply chain like no other. Sooner or later, the rest of the industry will copy its methods. The OEM as manufacturer will be back in vogue.

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About Mike

Mike Buetow is editor-in-chief of Circuits Assembly magazine, the leading publication for electronics manufacturing, and PCD&F, the leading publication for printed circuit design and fabrication. He is also vice president and editorial director of UP Media Group, for which he oversees all editorial and production aspects. He has more than 20 years' experience in the electronics industry, including six years at IPC, an electronics trade association, at which he was a technical projects manager and communications director. He has also held editorial positions at SMT Magazine, community newspapers and in book publishing. He is a graduate of the University of Illinois. Follow Mike on Twitter: @mikebuetow