Sunday, August 12, 2007

Quality of Apples and Dells from One Big Factory in China

There is a fascinating article in this weekend's WSJ about "The Forbidden City of Terry Gou", a huge electronics factory in Shenzhen, China, where a half-a-million strong army of workers churn out Apple iPods, iPhones, Dell laptops, etc. The importance of this factory is emphasized through statements like "presently all iPhones are made here" and the quotes that western customers get addicted to such cheap and cost-effective manufacturing.

Amen to the entrepreneurial spirit of Mr. Terry Gou, whose Taiwanese company by the name Hon Hai runs the factory, along with many others in mainland China. The guy apparently drove around the US in the 80s and 90s to pitch his company's manufacturing capabilities. Now his company has operations in dozens of countries. Who says entrepreneurial spirit flourishes in the Silicon Valley or London only?

The article goes on to highlight some allegations of poor conditions for the workers; apparently there was a news scandal with some folks accusing Apple of using exploited labor to make their iPods at Mr. Gou's factory. I can hardly believe Apple's assessment that a majority of Apple-set standards were being complied with, but lets leave the politics and human rights aside for now.

What do you make of the following argument I put forth:

"The notion of an Apple product being of higher quality than a Dell product (or visa versa) is flawed. After all, they are all produced in the same factory"

Now there are many possibilities here which may blunt the above statement. For example,

1. Part of the quality of a product, say in years of successful operation, depend on product design.

2. The quality checking of an Apple product may be more stringent than a Dell product (or visa versa).

But still, there is no denying that a significant part of the quality in any manufactured product stems from how well trained the workforce is, and what sort of raw materials and machinery is used to make products. So I conclude that many products that are made in the same huge factories of China and sold all over the World have the same (or suffer from) quality issues.

Next time I choose between "Made in China" products, I am going to partially discount any claims of one product being of a better quality than the other.