The risk of this approach is that it gives too much power to the supplier. So under Tim Cook’s leadership, Apple had built redundancy into the supply chain, teaching multiple vendors how to do the same thing to mitigate risks of overdependence. “Every year there’d be discussion about our huge reliance on a small number of companies. What would happen if one of these companies were to stumble?” says one manufacturing design engineer. “Certainly at the component level,” this person adds, “even Foxconn didn’t have the space for the machines to make the components we needed, so we were kind of forced to find second sources, third sources.”
Given Apple’s scale and manufacturing concentration, the result of this strategy is that Apple spawned the formation of major industrial clusters in which engineers from Cupertino would teach multiple factories how to, say, shape glass for the iPhone. So instead of being beholden to Len Technology—the company that cut and tempered Corning class for the first iPhone—Apple would constantly send engineers form Cupertino to train its rivals. That kept Lens on its toes, lest Apple choose a different supplier for the next-generation iPhone—a potential catastrophe as Apple, by 2015, was producing a quarter billion iPhones per year. Moreover, it kept Lens from raising its prices. So any company supplying Apple with some component was preemptively thwarted from believing it had any power to exert, because Apple made it known it had options.
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