Apple looking to quadruple software development outsourcing to India - report

Posted:
in General Discussion edited January 2014


Apple is said to be planning to quadruple the amount it spends to outsource software application development and maintenance work to India.



About $100 million is currently spent at Apple to outsource such work to Indian companies, with the nation representing about a fifth of Apple's total outsourcing dollars. But according to the Economic Times (via iSmashPhone), Apple's spending in India is set to drastically increase.



Citing more than a dozen people familiar with Apple's outsourcing plans, the report revealed that late last month, Apple Chief Information Officer Niall O'Connor visited with India-based technology services companies Infosys and Wipro.



Outsourcing is unique for a company as secretive as Apple. The report noted that the iPhone maker relies on resource planning software from Germany's SAP to manage its complex overseas supply chain.



"One of the top reasons for Apple to be so secretive about outsourcing to India is increased public scrutiny in the US of companies creative jobs overseas, especially at a time it has become difficult to save manufacturing jobs from going to China," the report said.











In addition to being potentially lucrative for companies like Infosys and Wipro, Apple's increased presence in India would also be something of a morale booster for employees. The report characterized simply working with Apple as a "badge of honour," and compares favorably to a company like General Electric, which reportedly outsources work at much lower rates.



Last month, it was said that the "doors are now open" for Apple to expand its retail presence into India for the first time. The government of the most populous country in the world recently changed local laws to allow full ownership of single-brand retail stores by foreign companies, a move that is said to have gained interest from Apple.



[ View article on AppleInsider ]

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Comments

  • solipsismxsolipsismx Posts: 19,566member
    I don't like this at all. When a company outsources programming to a country with inexpensive labour you can't help but lose a bit of your culture, philosophy, and even reliability in the process.



    Unlike the workers at Foxconn who do an unpleasant and repetitive menial task all day you can't write code on an assembly line. A programmer is a thinker. They are not doing something repetitive otherwise that task could be had by a simple computer program. The best case scenario for farming is in bug testing but even that has potential pitfalls.



    edit: I fond this:
    Why Some Software Companies are Confusing the Box for the Chocolates

    But writing innovative software cannot be done on an assembly line. It requires hard-to-find development and design skills. Farming out development to legions of programmers overseas will not create a differentiation advantage. When a technology company outsources software development, that company loses its capacity to innovate and its competitive advantage.
    edit 2: Of course, if India is the next big market for Apple after China which is the reason for the push and they are finding great programmers, not just cheap programmers, then I withdrawal my complaints. That said, it sure doesn't read that way to me.
  • screamingfistscreamingfist Posts: 971member
    Quote:
    Originally Posted by AppleInsider View Post


    Apple is said to be planning to quadruple the amount it spends to outsource software application development and maintenance work to India.



    About $100 million is currently spent at Apple to outsource such work to Indian companies, with the nation representing about a fifth of Apple's total outsourcing dollars. But according to the Economic Times (via iSmashPhone), Apple's spending in India is set to drastically increase.



    Citing more than a dozen people familiar with Apple's outsourcing plans, the report revealed that late last month, Apple Chief Information Officer Niall O'Connor visited with India-based technology services companies Infosys and Wipro.



    Outsourcing is unique for a company as secretive as Apple. The report noted that the iPhone maker relies on resource planning software from Germany's SAP to manage its complex overseas supply chain.



    "One of the top reasons for Apple to be so secretive about outsourcing to India is increased public scrutiny in the US of companies creative jobs overseas, especially at a time it has become difficult to save manufacturing jobs from going to China," the report said.









    In addition to being potentially lucrative for companies like Infosys and Wipro, Apple's increased presence in India would also be something of a morale booster for employees. The report characterized simply working with Apple as a "badge of honour," and compares favorably to a company like General Electric, which reportedly outsources work at much lower rates.



    Last month, it was said that the "doors are now open" for Apple to expand its retail presence into India for the first time. The government of the most populous country in the world recently changed local laws to allow full ownership of single-brand retail stores by foreign companies, a move that is said to have gained interest from Apple.



    [ View article on AppleInsider ]



    i like the sound of that. who needs to keep workers in USA when you are struggling with 100 billion in the bank...

    article may be crap, if not, middle finger to Apple.
  • popnfreshpopnfresh Posts: 139member
    Yet more American jobs shipped overseas. Thanks for nothing, Apple.
  • replicantreplicant Posts: 121member
    As Jobs said to Obama: those jobs aren't coming back.
  • leeeh2leeeh2 Posts: 21member
    Quote:
    Originally Posted by SolipsismX View Post


    I don't like this at all.



    I second your comment. A fairly large company that I use to work for outsourced software to India, and our software was accidentally published to the very "open" web. I have many stories, but this one seems to be related to the story. Apple is very secretive. This just seems counter intuitive to me.
  • icarbonicarbon Posts: 196member
    my issue with this has nothing to do with my hopes or dream for the American economy. I just think that this is going to work every bit as crappily as big pharma outsourcing. It just hasn't been profitable for them in the vast majority of cases. My understanding is that outsourcing basic labor is fine (for example, big pharma asking for a library of 1,000 random compounds to fill out a patent), but when you need real quality control and creative input (in big pharma, the example would be lead development on a new API), things quickly fall apart -- deadlines are missed, materials are misrepresented in terms of purity or identity, and it ends up costing far more than doing the same job in house.



    If apple is looking for little tweaks or database building, I think that this could work out fine -- but I just don't see them being able to ask for quality coding, program design or maintenance of secrecy with anything they send... making this a highly questionable plan.
  • hmurchisonhmurchison Posts: 11,890member, moderator
    I'm in favor of more taxes for corporations that outsource heavily.



    Trickle down has failed. Apple doesn't outsource heavily...even 100 million today is a sneeze and quadrupling that isn't that big of a deal as compared to manufacturing in China but at some point the US Government has to stick to their guns and start taxing appropriately
  • umrk_labumrk_lab Posts: 550member
    Quote:
    Originally Posted by hmurchison View Post


    ....but at some point the US Government has to stick to their guns and start taxing appropriately



    No, no, I won't say anything ....
  • jason98jason98 Posts: 709member
    Quote:
    Originally Posted by SolipsismX View Post


    I don't like this at all.



    Well, if they have been doing this already and even plan to grow, this seems like a proven success for them. It is opposite to our experience - after dealing with Indian outsources, what we are left with is a bunch of unmaintainable, poorly designed code only good to be thrown away.
  • irelandireland Posts: 16,077member
    How dare Apple run its company as it sees fit. If the US was competitive with India and China Apple wouldn't do this. It's simple free market economics.
  • afrodriafrodri Posts: 184member
    Quote:
    Originally Posted by hmurchison View Post


    ...; Apple doesn't outsource heavily...even 100 million today is a sneeze and quadrupling that isn't that big of a deal as compared to manufacturing in China ...



    The article says the India currently gets $100M of the $500M Apple spends on outsourcing. If China is the only other country Apple outsources to, they would be getting $400M. If Apple quadruples its outsourcing to India, India would be getting about as much as China. Unless the manufacturing is China isn't considered outsourcing.
  • talkingnewmediatalkingnewmedia Posts: 78member
    Ha ha. you guys kill me. An Indian based website says that Apple is bringing business to town and everyone here gets riled up.



    Must be a slow day of rumors. How about we talk about that small iPad again That was a good one.
  • hmurchisonhmurchison Posts: 11,890member, moderator
    Quote:
    Originally Posted by umrk_lab View Post


    No, no, I won't say anything ....



    Don't worry my feeling won't be hurt. I have no political ambitions and realize

    the nothing as as cut and dry as it would appear but at many levels we have not

    created opportunities for the US in manufacturing.



    I know people that are steering away from Engineering and Comp Sci majors simply because

    the "there aren't enough qualified US citizens to hire" coming from companies becomes a

    self fulfilling prophecy as students begin to avoid areas that are easily outsourced.
  • anantksundaramanantksundaram Posts: 17,395member
    This report is a bit confusing. What does SAP have to do with software development and maintenance?



    This sounds to me more like some of the back-office processing stuff that is being outsourced? Not something like, say, coding software for OSX or iWork?
  • anantksundaramanantksundaram Posts: 17,395member
    Quote:
    Originally Posted by ireland View Post


    how dare apple run its company as it sees fit. If the us was competitive with india and china apple wouldn't do this. It's simple free market economics.



    +1...
  • ochymingochyming Posts: 474member
    Bad Apple.

    I am not an US citizen, tho.



    : No, corporations are not people, they are for-profit organizations.

    Ç But imagine if Google and Microsoft do make biz like Apple, no licensing, no standing on others shoulders?

    : UH? I wonder if Samsung will not be in the position of buying either Google or Microsoft.
  • America is broken. All it needs is to get dragged into another war, a Churchill equivalent and it'll be well and truly sunk just like the British Empire of last century. Apple execs know where the new markets are...transition is painful.
  • aaarrrggghaaarrrgggh Posts: 1,538member
    I'm not too fond of the outsourcing of positions, but the globalization of functions, and developing regional headquarters with employees is not a terrible path. I'm not especially fond of India, but I do support efforts to help growth there.



    But... there is an upshot. It could pose a new lease on life for the Mac platform, and applications like Final Cut if resources can be better utilized and Apple is able to dramatically increase headcount in software development.
  • paxmanpaxman Posts: 4,289member
    Quote:
    Originally Posted by hmurchison View Post


    I'm in favor of more taxes for corporations that outsource heavily.



    Trickle down has failed. Apple doesn't outsource heavily...even 100 million today is a sneeze and quadrupling that isn't that big of a deal as compared to manufacturing in China but at some point the US Government has to stick to their guns and start taxing appropriately



    You don't say? Did anyone ever think it could work? The most transparent excuse ever by the rich to feed the rich. The fact that anyone but the very wealthy could ever buy into such a theory is pretty unbelievable when you think about it.



    Ok, enough of that (Just jumped out at me and struck me kind of funny)



    I am not sure we know enough about Apple's investment in India to make assumptions. It could be work targeting the Indian population. It could be debugging work.
  • afrodriafrodri Posts: 184member
    Quote:
    Originally Posted by hmurchison View Post


    I know people that are steering away from Engineering and Comp Sci majors simply because

    the "there aren't enough qualified US citizens to hire" coming from companies becomes a

    self fulfilling prophecy as students begin to avoid areas that are easily outsourced.



    The US Government also has an annoying habit of making it difficult for foreign students to stay in the country once they get a technical education. Combining this with the unwillingness of native-born students to enter the field, and the country ends up losing the very people who are needed to build an advanced economy.



    At one time, someone with an advanced degree from the US had every incentive to stay in the US and work. Now, they can find good jobs back home, plus the US puts roadblocks in their way if they want to stay.
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