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Why Apple Backed out from India?
rmunaval writes "BusinessWeek reports an interesting article on why Apple might have backed out from India. The prime reason being, India has grown at a much more rapid rate than expected and is no longer the cheap destination for the companies. It grew at an astonishing rate of 9.3% last quarter."
Funny, back when there was so much lather over outsourcing everything but the CEO to India, a few folk mentioned that this might happen and were replied to that with 2 billion people it won't happen in our lifetimes. Hope you are all doing ok!
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
Now India will feel the pain as jobs are outsourced to Asia and Eastern Europe where rates are cheaper! Pretty soon, people in Zimbabwe will be coding :)
http://psychicfreaks.com/The most likely reason that comes into my mind is a power struggle of some sort between management of that company. I bet someone was sold on an idea that moving jobs to India would cut costs, but then someone else was in the opposite camp and we just saw the result of that battle. Was any manager fired from the company within the past month?
You can't handle the truth.
Apple is a publicly traded company and as such here's what's important to them.....
Making money for their stockholders.
That means sweatshops for iPods and doing things like heading down the dangerous path of closing off the Darwin source for development so that OSS geeks can't find a way to make OS X work on commodity boxes.
Apple is going to do what is best in their corporate interest. Surprised? Don't be. It's business
Am I the only one who sees this as utterly fascinating?
In a way US corporation going to India stimulated this growth. It is interesting to me that India has changed because of outside investment but the way they have changed has made them less appealing to those same investors.
Globalization is bitch, isn't it?
I don't give a damn for a man that can only spell a word one way.
Mark Twain
They were paid a living wage (or something close to it). The only difference is that a living wage in Cupertino, CA is WAY higher than one in Calcutta or Bangledesh. Heck, the living wage in Cupertio is WAY higher than one in Kansas City, MO or De Moins, IO.
Comment forecast: Bits of genius surrounded by a sea of mediocrity.
Doesn't the part of knowing when to cut and run imply that it was the right decision? The way I've always looked at outsourcing as an engineer is that you want to have people of varying backgrounds in any large organization. I think that India and China are part of this along with the US and others. Other countries will come into the fold as well, but I think that it'll be for the better of the company to have multiple groups with different backgrounds and experiences.
Now, it sounded like this venture was purely for help desk, which I think is being performed at a commodity level nowadays (in the sense that all service seems to suck, given that good service costs money). In that case, moving to wherever it is cheapest is probably a good move. Though maybe they'll just add to the number of workers woring 15-hour days in China.
-dave
/., where "Apple and Google provide Iran with nukes" will be refuted with "But Microsoft is a convicted monopolist"
What we are at this point seeing are the first steps in a cycle of balance.
India has been in a horrible financial condition. It's got large amounts of debt and it's trying to work it's way out of them. This comes with financial assistance from the international community. You have many of these poorer nations not able to afford the subsidies anymore for farmers , which means more people migrating to the cities for the promises of these fantastic tech jobs.
Problem is the cities aren't ready to handle all these people, and the government isn't ready to handle all this displaced workforce. Result? SLUM TOWN!
Uh Oh, now the international community is on nations to provide a base level of support for their people. They don't want sweat shops and shanty towns of workers paid pennies on the dollar of what others get. India has to rely for a good deal on it's own people to solve this problem for themselves because they don't have the money to. If they want to they have to start taxing these companies more, which means.... costs go up. On an individual level? How to get out of the slum, you have to get paid more so you can afford to live there, you demand more pay.. they demand more for your contracting.. Costs rise...
Suddenly all those cost benefits from outsourcing start evaporating.
From my personal perspective.. yay. This is far more effective a way to "keep jobs here" than trying to legislate some mandate for companies to do so. In this case, the "free market economy" is actually doing it's job.
I'm a fiscal conservative, it's a pity we don't have a political party anymore
Actually I wouldn't be surprised if they were getting a living wage all along. Problem is that the living wage went up.
Not until the Indian workers train their Nigerian replacements.
Lost: Sig, white with black letters. No collar. Reward if found!
Not until the Indian workers train their Nigerian replacements.
The problem with this is that we're running out of areas that have decent education standards, easy access to raw supplies, and, perhaps most importantly, are stable yet have low wages/cost of living. India was fairly unusual in that they had decent universities/colleges(though not enough of them) churning out qualified graduates, a large labor pool, stability, and a cheap cost of living/wage range that encouraged importation of work.
Areas like Nigeria haven't solved these problems yet, thus raising the costs of locating there, even if their labor is dirt cheap. When you have to import the machines, supplies, and labor to build the factory and trainers to teach them how to operate the equipment, costs rise. It'll be a while before they have enough people skilled enough to replace indian programmers.
Not that I object to businesses building factories there, as providing jobs, income, and training are some of the best ways to improve the above. People with paying jobs generally don't have much free time available to go play rebel.
I don't read AC A human right
How much is a living wage? Is it different if I'm single and live with 3 roommates? How about if I have 12 children (6 with "special needs")?
Should I expect to have to provide my employer with more work (or more valuable work) for the higher "living wage" I need for my family situation?
Because I thought I was supposed to get a "working wage" -- based on the value of my work.