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Apple looking to quadruple software development outsourcing to India - report

post #1 of 119
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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 ]
post #2 of 119
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.

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post #3 of 119
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.
post #4 of 119
Yet more American jobs shipped overseas. Thanks for nothing, Apple.
post #5 of 119
As Jobs said to Obama: those jobs aren't coming back.
post #6 of 119
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.
post #7 of 119
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.
post #8 of 119
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
He's a mod so he has a few extra vBulletin privileges. That doesn't mean he should stop posting or should start acting like Digital Jesus.
- SolipsismX
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He's a mod so he has a few extra vBulletin privileges. That doesn't mean he should stop posting or should start acting like Digital Jesus.
- SolipsismX
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post #9 of 119
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 ....
post #10 of 119
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.
post #11 of 119
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.
Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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post #12 of 119
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.
post #13 of 119
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.
post #14 of 119
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.
He's a mod so he has a few extra vBulletin privileges. That doesn't mean he should stop posting or should start acting like Digital Jesus.
- SolipsismX
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He's a mod so he has a few extra vBulletin privileges. That doesn't mean he should stop posting or should start acting like Digital Jesus.
- SolipsismX
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post #15 of 119
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?
post #16 of 119
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...
post #17 of 119
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.
post #18 of 119
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.
post #19 of 119
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.
post #20 of 119
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.
post #21 of 119
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.
post #22 of 119
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

What rank hypocrisy!

Are you also not in favor of not 'outsourcing' our need for petroleum products, and instead, drilling locally? (And if we can't/won't, then you agree to live without the internal combustion engine?)

How about not 'outsourcing' for our need for German/Japanese cars, but make them here instead? (And, if we don't/can't, would you only drive one made in the USA with fully USA-made parts?)

Why 'outsource' for components such as casings, glass, semiconductors? It they won't be made here, would you not consume the products (such as iPods, iPads, Macs, iPhones) that use such imported components?

Why are not these - I could add dozens more - examples of 'failed trickle down'? Because they suit your lifestyle?
post #23 of 119
Quote:
Originally Posted by hmurchison View Post

... 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.

To the first part, there have been a number of opportunities in manufacturing created over the past 20-30 years within the US. You either need to run a very very tight ship, or you need to be protected by things like defense contracts.

As for the second part, everything I see is that those disciplines no longer attract the "best and brightest", as everybody wants to be a lawyer or a finance person. The number of grads is reasonably consistent over time, but aptitude has dropped. There is also the issue of work ethics, but I understand both sides of that coin.
post #24 of 119
Quote:
Originally Posted by paxman View Post

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.

The article seems to indicate that Apple will outsource developing applications to support its internal IT requirements (e.g. shipping, supply chain management, etc...) rather than directly develop end-user code.
post #25 of 119
http://static.seekingalpha.com/uploa...uebyregion.jpg


thanks America. keep on buying! we love you!
post #26 of 119
Quote:
Originally Posted by paxman View Post

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.

Reminds of a quote from Black Adder.

Baldrick: They say he's half-way to being the new Robin Hood.
Edmund: Why only half-way?
Baldrick: Well he steals from the rich, but he hasn't got round to giving it to the poor yet.

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

 

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post #27 of 119
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.

In the (very high-quality) university in the town where I live, nearly 100% of the Masters' students in CS are of either Indian or Chinese descent. There isn't a single white (or black or hispanic) kid born in the US in the Masters' program. And, every single one of them that I know works for a company in the US. Not one has gone back to India or China.
post #28 of 119
I can understand Apple making hardware overseas in places like China, but why would they need to outsource the creative portion?

Will the next version of Mac OS X come with a built in Indian accent? It's not enough that I have to speak with somebody with an Indian accent whenever I call certain US companies who are greedy bastards and they outsource their support lines to foreigners who speak piss poor English that sounds like gibberish half of the time?
post #29 of 119
Quote:
Originally Posted by anantksundaram View Post

In the (very high-quality) university in the town where I live, nearly 100% of the Masters' students in CS are of either Indian or Chinese descent. There isn't a single white (or black or hispanic) kid born in the US in the Masters' program. And, every single one of them that I know works for a company in the US. Not one has gone back to India or China.

my best friend majored in CS and minored in math. at university a chinese student stole his work and tried to pass it off as his own.
i guess no one is perfect....
post #30 of 119
Quote:
Originally Posted by hmurchison View Post

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.

Well, since you encourage me , here it is :

I am myself an engineer, in a country which (like many others) watch the disappearing of industrial jobs (including the more qualified engineers ones). A country where, very often, many people blame those who expect a solution from the government to this situation.

Without entering into a political debate, my understanding of the US viewpoint is that "you" (as american) believe it is an illusion to expect any solution to this coming from the government, whatever it is (e.g. through whatever taxing scheme you may imagine). So I am surprised to read the opposite opinion from "you" (but my "knowledge" of American viewpoint may admittedly be wrong, of course).

Preserving jobs in high level wages countries can only be achieved through innovation, and this is precisely what Apple does. Apple is successful, Apple innovates, "what is good for Apple is good for "you"" (and for me, as Apple customer).

The jobs balance situation for lower margin products (say, PCs ...) can only be worse ...

Now, coming back to other posts about India, I think "you" should not underestimate Indian skills. A lot of Indian engineers have Phd level. They are extremely meticulous people (I can see that in my job, on which I prefer not to give any other details).

Many large companies (US and non-US) outsource software to India (e.g. Bangalore region).
post #31 of 119
This is probably part of gaining better access to the Indian market. They give India some work, the red tape clears on expanding their retail presence there, etc.
post #32 of 119
This news wouldn't bother me as much if Apple were outsourcing to firms that weren't as shady as Infosys.

I've worked extensively with Infosys at 2 US companies now. In each instance the best they could do was write unmaintainable code that doesn't scale but works in the short term. The worst they could do was instruct their TPMs to forward all of our proprietary tech documents and code back to India so they could use it on unrelated projects for other clients (btw this is not just a rumor I heard, I have first-hand knowledge of this happening).
post #33 of 119
Quote:
Originally Posted by SolipsismX View Post

Reminds of a quote from Black Adder.

Baldrick: They say he's half-way to being the new Robin Hood.
Edmund: Why only half-way?
Baldrick: Well he steals from the rich, but he hasn't got round to giving it to the poor yet.




Well the Trickle Down theory could perfectly well have been conceived by Black Adder himself.

I haven't seen an episode in donkey's years but reading the names in your post made me smile. Atkinson at his despicably best.
post #34 of 119
Quote:
Originally Posted by SolipsismX View Post

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.

My first impulse was to agree 100%. What you have said is true.

When I read the article again though I get a sense that the application/s they will be developing and maintaining will be more along a database/accounting/supply chain management nature.
Indians have a long tradition of that kind of programming work. Not so much ... the more creative things you worry about. I guess I'll trust Apple knows what it's is doing and is only outsourcing that which is suitable to that particular subset of programming talent. However, see post #32. I hope this isn't the beginning of the Law of Large Numbers taking effect.
What is really factored into the price is a kind of perpetual sense of disbelief that any company could be as good as Apple is. ~Retrogusto
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What is really factored into the price is a kind of perpetual sense of disbelief that any company could be as good as Apple is. ~Retrogusto
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post #35 of 119
Quote:
Originally Posted by palomine View Post

My first impulse was to agree 100%. What you have said is true.

When I read the article again though I get a sense that the application/s they will be developing and maintaining will be more along a database/accounting/supply chain management nature.
Indians have a long tradition of that kind of programming work. Not so much ... the more creative things you worry about. I guess I'll trust Apple knows what it's is doing and is only outsourcing that which is suitable to that particular subset of programming talent.

That article I linked to agrees with you...
Quote:
Outsourcing programmers works when the software developed isnt a key part of the pipeline of innovation for products a company actually sells. For example, when website design or back-office software such as payroll or inventory control is outsourced, that can be good because it improves operational effectiveness.

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post #36 of 119
Quote:
Originally Posted by anantksundaram View Post

In the (very high-quality) university in the town where I live, nearly 100% of the Masters' students in CS are of either Indian or Chinese descent. There isn't a single white (or black or hispanic) kid born in the US in the Masters' program. And, every single one of them that I know works for a company in the US. Not one has gone back to India or China.

Most of my CS friends are of foreign descent. Compared to other countries, the US doesn't strive for nor offer many engineering programs.

People in the states are too concerned for saving blue-collar jobs, or the other extreme, corporate (Wall St.) jobs. There's no willingness to continue 'expansionary' vocations like engineering, research or the arts -- folks are scared of losing their homes & so they'll take any job.

The pool of intellectual candidates is much smaller when your workforce is made up of baristas with less than a high school diploma.
post #37 of 119
Quote:
Originally Posted by paxman View Post



Well the Trickle Down theory could perfectly well have been conceived by Black Adder himself.

I haven't seen an episode in donkey's years but reading the names in your post made me smile. Atkinson at his despicably best.

Remember the Stupid Prince. That was before Hugh Laurie was a household name... at least in the US. House MD will ending the series (and by series I mean the American usage) this year. I have to assume he will die, perhaps doing one last thing to stick to the man and prove he's right by taking his own life to save a patient.

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

 

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post #38 of 119
the multitude of other companies that get rid of American workers in favor of workers in other countries that earn much much less and have much worse working conditions.

So why are they talking about expanding their headquarters if they are moving the jobs out of the country?
post #39 of 119
Quote:
Originally Posted by SolipsismX View Post

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.

Could not agree more.
post #40 of 119
Quote:
Originally Posted by SolipsismX View Post


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.

Samsung's Bada OS was developed in India and since it is damn good, I would say there definitely is talent there.
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