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Why Apple Backed out from India?

Posted by ryuzaki0 on from the gettin'-out dept.

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."

8 of 394 comments (clear)

  1. India to start losing jobs. by gasmonso · · Score: 5, Insightful

    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/
  2. Most likely reason by roman_mir · · Score: 5, Insightful

    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.
  3. Not that this should be a shock or anything... by GundamFan · · Score: 5, Insightful

    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
  4. Re:Oh crap. . . by MBCook · · Score: 5, Insightful

    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.
  5. A little premature to call it the right move by planetmn · · Score: 5, Insightful
    From the article:
    Yet he is also a tough-minded executive who knows when to cut and run. That's why Apple Computer Inc. has shelved plans to build a sprawling technical support center in Bangalore, even as IBM (IBM ) and other tech powers are ramping up.


    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"
  6. Re:Reality Check for the Cult of Apple (tm) by aussie_a · · Score: 5, Insightful

    Don't be. It's business

    Doesn't have to be. Stand up and support companies that share and uphold your ideals and beliefs by giving them your money.

    Or you can go for the cheapest company and help them screw over your fellow man.

  7. Re:Markets work yet again by Firethorn · · Score: 5, Insightful

    While I can't claim to have predicted that this would happen so soon, I will say that I saw it coming.

    Part of what happened that made this happen sooner is that the Indian quality of life, bolstered by all sorts of outside companies outsourcing there and pouring money and jobs into their economy, rose. This of course becomes a positive cycle, where the newly wealthy* start demanding more**.

    This sucks up potential labor far faster than simply looking at the unemployment/agricultural worker numbers.

    We're seeing the results now. India's currency is gaining strength, the dollar is loosing strength. Soon it'll no longer be as economical to outsource to asian countries(China will take longer). Soon it'll make more sense to outsource from expensive american cities to inexpensive smaller cities, larger towns, or downright rural locations within the United States. Arkansas costs half as much to live in than Hawaii.

    *relativly of course. They might still be 'poor' by 1st world standards, but they're no longer 'dirt poor'
    ** Services like telephones, internet, more frequent hair cuts, eating out, things like bigger, better constructed homes, vehicles, etc...

    --
    I don't read AC A human right
  8. living wage? by Kohath · · Score: 5, Insightful

    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.